Upload
others
View
1
Download
0
Embed Size (px)
Citation preview
Profile of Assam
Assam is a Special Category State and is situated in the North-East region of
India bordering seven States viz., Arunachal Pradesh, Nagaland, Manipur,
Mizoram, Tripura, Meghalaya and West Bengal and two countries
viz., Bangladesh and Bhutan. With a geographical area of 78,438 sq. kms
i.e., about 2.4 per cent of country‟s total geographical area, Assam is home
to 2.58 per cent population of the Country. As indicated in Appendix 1.1
(Part-D), the State‟s population increased from 2,66,55,528 in 2001 to
3,11,69,272 in 2011 recording a decadal growth of 16.93 per cent. The percentage
of population below the poverty line at 40.9 per cent was higher than the all-India
average of 30 per cent. State‟s Gross Domestic Product (GSDP) at current prices
increased from ` 1,98,098 crore in 2014-15 to ` 2,24,234 crore in 2015-16
(Base year – 2011-12) recording a growth of 13.19 per cent. The State‟s literacy
rate increased from 63 per cent (as per 2001 census) to 72.19 per cent
(as per 2011 census) which is equivalent to All India Average of 72.99 per cent.
State‟s per capita income at current prices also increased from ` 54,618 in
2014-15 to ` 69,442 in 2015-16. General and financial data relating to the State
are given in Appendix 1.1 (Part-D), Appendix 1.3 and Appendix 1.4.
Gross State Domestic Product (GSDP)
GSDP is the market value of all officially recognised final goods and services
produced within the State in a given period of time. The growth of GSDP of the
State is an important indicator of the State‟s economy as it indicates the standard
of living of the State‟s population. The trends in the annual growth of India‟s
Gross Domestic Product (GDP) and Assam‟s GSDP at current prices are
indicated in Table 1.1 below.
Table 1.1: Trends in growth of GDP and GSDP (` in crore)
Year 2011-12 2012-13 2013-14 2014-15 2015-16
India’s GDP
Base Year (2011-12)
87,36,039 99,51,344 1,12,72,764 1,24,88,205 1,35,76,086
Growth rate of GDP over
previous year (In per cent)
--@ 13.91 13.28 10.78 8.71
State’s GSDP
Base Year (2011-12)
1,43,175 1,56,864 1,77,745 1,98,098 2,24,234
Growth rate of GSDP over
previous year (In per cent)
--@ 9.56 13.31 11.45 13.19
Source of data: Department of Economics and Statistics and Central Statistics Office (CSO);
@ Growth rate of GDP and GSDP not indicated, since comparison with the year 2010-11 could not be made
as the base year has been revised to 2011-12.
Chapter-I
Finances of the State Government
Chapter I-Finances of the State Government
Audit Report on State Finances for the year ended 31 March 2016 2
1.1 Introduction
This chapter is based on the audit of Finance Accounts and makes an assessment
of the fiscal position of the Government of Assam as on 31 March 2016.
It provides a broad perspective of the finances of the Government of Assam for
the year 2015-16 and analyses critical changes observed in the major fiscal
aggregates in relation to the previous year, keeping in view the overall trends
during the last five years. The structure and form of Government accounts have
been explained in Appendix 1.1 (Part-A) and the layout of the Finance Accounts
is depicted in Appendix 1.1 (Part-B). The definitions of some of the selected
terms used in assessing the trends and pattern of fiscal aggregates are also shown
in Appendix 1.1 (Part-C).
1.1.1 Summary of Current Year’s Fiscal Transactions
Table 1.2 presents the summary of the State Government‟s fiscal transactions
during the current year (2015-16) vis-à-vis the previous year while Appendix 1.2
provides details of receipts and disbursements as well as overall fiscal position
during the current year vis-à-vis the previous year.
Table 1.2: Summary of Current Year’s Fiscal Operations
(` in crore)
Receipts Disbursements
2014-15 -- 2015-16 2014-15 -- 2015-16
Non-Plan Plan Total
1 2 3 4 5 6 7 8
Section-A: Revenue
38,181.49 Revenue Receipts 42,457.70 39,078.17 Revenue
Expenditure
27,575.95 9,435.56 37,011.41
9,449.81 Tax Revenue 10,106.50 12,921.60 General Services 12,584.62 71.41 12,656.03
2,412.89 Non-Tax Revenue 2,741.57 18,087.74 Social Services 10,937.48 6,802.88 17,740.36
12,283.71 Share of Union
Taxes/Duties
16,784.88 7,075.33 Economic
Services
3,678.59 2,561.27 6,239.86
14,035.08 Grants from
Government of
India
12,824.75 993.50 Grants-in-Aid/
Contributions
375.16 - 375.16
Section-B: Capital
- Miscellaneous
Capital Receipts
3,912.27 Capital Outlay (-) 13.14 2,704.05 2,690.91
10.13 Recoveries of
Loans and
Advances
510.09 630.71 Loans and
Advances
disbursed
- - 260.09
4,582.26 Public Debt
Receipts
5,497.99 16,27.03 Repayment of
Public Debt
- - 1,968.90
- Contingency Fund - - Contingency
Fund
- - -
17,789.87 Public Account
Receipts
15,702.12 16,376.43 Public Account
disbursement
- - 15,647.26
- Closing overdraft
from Reserve
Bank of India
- - Opening overdraft
from Reserve
Bank of India
- - -
4,527.99 Opening Balance 3,467.13 3,467.13 Closing Balance - - 10,056.46
65,091.74 Total 67,635.03 65,091.74 Total - - 67,635.03
Chapter I-Finances of the State Government
3 Audit Report on State Finances for the year ended 31 March 2016
Following are the significant changes during 2015-16 over the previous year:
Revenue Receipts grew by ` 4,276 crore (11 per cent) over the previous
year. The increase was contributed by Tax Revenue ` 656 crore
(15 per cent), Non-Tax Revenue by ` 328 crore (eight per cent) and
State‟s share Union Taxes and Duties by ` 4,502 crore (105 per cent).
The increase was however, offset by decrease in Grants-in-Aid from
Government of India (GOI) by ` 1,210 crore (28 per cent).
The Revenue Receipts at ` 42,457 crore was more by ` 2,596 crore than
the assessment made in Medium Term Fiscal Plan (MTFP)1
(` 39,861 crore).
The increase of ` 656 crore in Tax Revenue in 2015-16 as compared to
previous year was mainly on account of increase of taxes on Sales, Trade
etc. as well as State Excise by ` 143 crore each, Land Revenue by ` 87
crore and taxes on vehicles by ` 78 crore. The Tax Revenue as a
percentage of GSDP (4.51 per cent) was significantly lower than the
assessment of XIV FC (7.20 per cent). It was also lower than the
projections made by the State Government in its MTFP (5.63 per cent).
The significant increase in receipt of State‟s share in Union Taxes and
Duties by ` 4,502 crore (36.65 per cent) was mainly due to more
assignment of net proceeds under Corporation Tax (` 983 crore), Taxes on
Income other than Corporation Tax (` 590 crore), Customs (` 702 crore),
Union Excise Duties (` 1,128 crore) and Service Tax (` 1,093 crore).
However, the decrease in receipt of Grants-in-Aid from GOI by ` 1,210
crore (nine per cent) was mainly due to less allocation of funds for State
plan schemes.
Revenue Expenditure decreased by ` 2,067 crore over the previous year.
Of this decrease, Non-Plan Revenue Expenditure (NPRE) decreased by
` 2,111 crore, which was however, offset by increase under Plan Head by
` 44 crore. The major sectors that registered significant decrease include
Secretariat – General Services (` 302 crore), Public Works (` 262 crore),
Welfare of Scheduled Castes, Scheduled Tribes, Other Backward Classes
and Minorities (` 352 crore), Relief on Account of Natural Calamities
(330 crore), Secretariat – Economic Services (` 141 crore) and
Compensation & Assignment to Local Bodies & Panchayati Raj
Institutions (` 618 crore).
1 MTFP: As required under Section 3 of the Act, the State Government laid before the State Legislative
Assembly a five year rolling Fiscal Plan along with Annual Financial Statement showing therein the
relevant fiscal indicators and future prospects for growth.
Chapter I-Finances of the State Government
Audit Report on State Finances for the year ended 31 March 2016 4
Recoveries of Loans and Advances increased marginally by ` 500 crore
(5,000 per cent) whereas disbursement of Loans and Advances decreased
by ` 371 crore (59 per cent).
Public Debt Receipts and Repayments increased by ` 916 crore
(20 per cent) and ` 342 crore (21 per cent) respectively over the previous
year.
During 2015-16, both Public Account Receipts and Disbursement
decreased by ` 2,088 crore (12 per cent) and ` 729 crore (four per cent)
over the previous year.
Total inflow during 2015-16 was ` 64,167 crore against ` 60,563 crore in
2014-15 registering an increase of six per cent while total outflow during
2015-16 was ` 57,578 crore as against ` 61,624 crore in 2014-15
registering a decrease of seven per cent (Appendix 1.3).
1.1.2 Review of the fiscal situation
To support the State Government towards urgent fiscal correction, Thirteenth
Finance Commission (XIII FC) had worked out a fiscal consolidation roadmap
for Assam requiring the State to eliminate Revenue Deficit and achieve Fiscal
Deficit of three per cent of GSDP in each year of the award period.
Accordingly, Assam Fiscal Responsibility and Budget Management (AFRBM)
Amendment Act, 2011 was enacted by the State which came into force with effect
from 1st April 2010 retrospectively. As per the Act, the State Government was to
eliminate Revenue Deficit by 2011-12 and maintain revenue balance or attain
surplus thereafter and reduce Fiscal Deficit to three per cent of the estimated
GSDP by 2010-11 and maintain the same level thereafter. Further, the Act also
envisaged that the State Government would attain the total outstanding debt to
GSDP ratio at 28.40 per cent in 2012-13 and maintain the same level in 2013-14.
Further, the level of 28.50 per cent had to be maintained in 2014-15 and
thereafter.
Further, XIV FC also fixed similar targets for the State. The performance of the
State during 2015-16 in terms of key fiscal targets of the XIV FC set for selected
variables as laid down in AFRBM (Amendment) Act, 2011 vis-à-vis
achievements are given in Table 1.3.
Chapter I-Finances of the State Government
5 Audit Report on State Finances for the year ended 31 March 2016
Table 1.3: Trends in major fiscal parameters/variables
vis-à-vis projections for 2015-16
Fiscal variables 2015-16
Targets as prescribed
in AFRBM Act, 2011
Assumptions
made in Budget
(` in crore)
Projections
made in
Medium Term
Fiscal Plan
(` in crore)
Actual
(` in crore)
Revenue Deficit (-) /
Surplus (+)
(` in crore)
Eliminate Revenue
Deficit by 31.3.2012 and
attain Surplus thereafter.
(+) 62,565 (+) 1,201 (+) 5,446
Fiscal Deficit (-)/
Surplus (+)
(In per cent of GSDP)
Three per cent of GSDP
by 31.3.2011 and to
maintain the same level
thereafter.
(+) 52,391
(-) 3,646 (+) 3,005
(*)
Ratio of total
outstanding debt of
the Government to
GSDP (In per cent)
28.50 per cent
(In 2015-16)
-- 99 18.91
*There was fiscal surplus.
The above table indicates that the State had achieved all three AFRBM targets
prescribed in the Act. During 2015-16, the State not only achieved Revenue
Surplus but exhibited Fiscal Surplus also. The outstanding liabilities of the State
stood at 18.91 per cent at the end of 2015-16 which was well within the norms
(26.25 per cent), prescribed by the XIV FC.
1.1.3 Budget Estimates and Actual
The budget papers presented by State Government provide descriptions of
projections or estimations of revenue and expenditure for a particular fiscal year.
The importance of accuracy in the estimation of revenue and expenditure is
widely accepted in the context of effective implementation of fiscal policies for
overall Economic management. Deviations from the Budget Estimates are
indicative of the non-attainment and non-optimization of the desired fiscal
objectives due to a variety of causes, some within the control of the Government
and some beyond the control of the Government. Table 1.4 presents the
consolidated picture of State Finances during 2014-15 (Actuals) and 2015-16
(Budget Estimates, Revised Estimates and Actual) whereas Chart 1.1 shows the
picture of Budget Estimates and Actual of different financial parameters for the
year 2015-16.
Chapter I-Finances of the State Government
Audit Report on State Finances for the year ended 31 March 2016 6
Table 1.4: Variation in Major items – 2014-15 (Actual) over 2015-16
(Budget Estimates, Revised Estimates and Actual)
(` in crore)
Sl.
No.
Parameters 2014-15 2015-16
Actual Budget
Estimates
(BE)
Revised
Estimates
(RE)
Actual Variation (In per cent)
1 Tax Revenue 9,450 25,648 22,994 10,106 (+) 6.94
2 Non-Tax Revenue 2,413 8,652 5,437 2,741 (+) 13.59
3 Revenue Receipts 38,181 1,14,128 88,810 42,457 (+) 11.19
4 Non-Debt Capital
Receipts
10
15
524
510 (+) 5000
5 Revenue Expenditure 39,078 51,563 58,275 37,011 (-) 5.29
6 Interest Payments 2,334 2,612 2,812 2,618 (+) 12.16
7 Capital Expenditure 3,912 9,413 11,297 2,691 (-) 31.21
8 Disbursement of Loans
& Advances
631
776
856
260 (-) 58.79
9 Revenue Deficit/Surplus (-) 897 (+) 62,565 (+) 30,535 (+) 5,446 (+) 707.13
10 Fiscal Deficit/Surplus (-) 5,430 (+) 52,391 (+) 18,906 (+) 3,005 (+) 155.34
11 Primary Deficit/Surplus (-) 3,096 (+) 55,003 (+) 21,718 (+) 5,623 (+) 281.62
During 2015-16, both actual Revenue Receipts and actual Revenue
Expenditure fell short of Budget Estimates by 63 per cent and 28 per cent
respectively.
During the current year the Tax Revenue of the State increased by
` 656 crore (seven per cent) over the previous year. The actual collection of
Tax Revenue during the year decreased significantly by ` 15,542 crore
(61 per cent) over the Budget Estimates which indicated that the projections
for the Budget Estimates for Tax Revenue were unrealistic.
Chapter I-Finances of the State Government
7 Audit Report on State Finances for the year ended 31 March 2016
Actual collection of Non-Tax Revenue increased by ` 328 crore
(14 per cent) over the previous year. It also fell short of Budget Estimates
by ` 5,911 crore (68 per cent).
Actual Revenue Expenditure decreased by ` 2,067 crore (five per cent)
during the current year over the previous year. It also decreased by
` 14,552 crore (28 per cent) over the Budget Estimates.
The Capital Expenditure as compared to Budget Estimates was less
by ` 6,722 crore (71 per cent). Actual expenditure also decreased by
` 1,221 crore (31 per cent) during the current year over the previous year.
Against the estimated Revenue Surplus of ` 62,565 crore, ` 5,446 crore was
registered as Revenue Surplus by the State during the current year.
Against the estimated Fiscal Surplus of ` 52,391 crore, the state ended up
with a Fiscal Surplus of ` 3,005 crore only.
The above table also indicates that the State achieved Surplus on all three key
fiscal parameters during 2015-16. However, it failed to achieve targets marked for
key fiscal indicators in the revised estimates. On Revenue Account, assessed
Revenue Surplus of ` 30,535 crore finally resulted into Revenue Surplus of
` 5,446 crore during 2015-16. In order to ensure sustainable progress towards
fiscal consolidation, State needs to continue to ensure a pattern of expenditure
that not only ensures better growth but also enhances Public Welfare.
1.1.4 Gender Budgeting
Gender Budgeting is a part of the Government of India‟s Policies and approach
towards women. The Government of India, Ministry of Human Resource
Development (MHRD) issued (October 2004) instructions and guidelines along
with checklist to watch the modalities and performance of the Gender Budgeting
which seeks to establish accountability and transparency in policy formulation
and decision making. The National Commission for Women took up (February
2006) the matter with the Chief Minister, Government of Assam for necessary
policy formulation in this regard. Therefore, Gender Budgeting was incorporated
as a significant statement highlighting the need to segregate budgetary allocations
on the basis of gender under the demands for grants.
The process of budgetary allocation on the basis of gender needs to be reviewed
continuously from year to year for giving priorities on specific sectors which
impinge on the lives of women. Access to Education, Employment, Health Care,
Sanitation and Drinking Water are considered to be the five pillars of Women
Empowerment. All these activities need outlays specifically earmarked for
women in the budget to be utilised for women specific programmes/schemes.
Chapter I-Finances of the State Government
Audit Report on State Finances for the year ended 31 March 2016 8
Gender Budget of the State (2015-16) disclosed that the expenditure was
proposed to be incurred within the overall budget on schemes designed to benefit
women under category „A‟2 and category „B‟
3. Test-check of records revealed
that Gender Budget was prepared in 28 departments during the financial year
2015-16 involving an amount of ` 5,103.38 crore with a target to benefit 42.98
lakh women as detailed in Table 1.5.
Table-1.5: Gender Budget
Sl.
No.
Name of
Department
Grant
No.
Total
No. of
schemes
Category-wise Budget allocation
(` in crore)
Total
(` in
crore)
Nos. of
targeted
beneficia
ries
Expen
diture
‘A’ B’
Plan Non
plan
Plan Non
plan
1 2 3 4 5 6 7 8 9 10 11
1 Excise 8 1 0.20 - - - 0.20 100
No
t av
aila
ble
2 Home Department 14, 15 1 - 10.93 0.03 - 10.96 30
3 Higher Education 26 1 0.03 0.05 - - 0.08 20
4 Public Health Engineering 30 1 713.87 - - - 713.87 553000
5 Health and Family
Welfare
32 1 0.85 0.85 - - 1.70 180
6 Information and Publicity 35 2 0.01 - 0.09 - 0.10 10
7 Labour and Employment 36 3 2.14 - 4.67 - 6.81 2090
8 Food, Civil Supplies and Consumer Affairs
37 1 2.50 - - - 2.50 6205
9 Welfare of Plain Tribes and
Backward Classes
38 5 4.92 - 4.93 - 9.85 472
10 Social Welfare 39 23 201.02 - 16.67 - 217.69 766453
11 Revenue and Disaster
Management
41 - 2.00 - - - 2.00 531
12 WMD (Assam Minorities Development Board)
42 12 7.31 - 7.78 - 15.09 2305
13 WMD (Char Areas
Development, Assam)
42 5 42.85 - .30 - 43.15 2543
14 Cooperation 43 2 0.69 - - - .69 42
15 Agriculture 48 1 5.00 - - - 5.00 422
16 Border Areas 50 - 168.80 6.252 175.05 -
17 Soil Conservation 51 - - - - - - -
18 Animal Husbandry and
Veterinary
52,53 10 1.50 - 9.25 9.25 7,502
19 Fisheries 54 - - - - - - -
20 Panchayat and Rural Development
56, 57 4 3,511.61 3,511.61 4,28,574
21 Industries and Commerce 58, 60 9 0.60 24.90 25.50 240
22 Sericulture 59 1 0.30 - - - 0.30 608
23 Handloom and Textiles 59 4 102.99 - - - 102.99 2522576
24 Agriculture 67 1 - - 0.40 - 0.40 37
25 Education 71 9 71.50 0.11 169.35 240.96 419704
26 Sports and Youth Welfare 74 7 - - 4.33 - 4.33 2373
27 Information Technology 75 2 0.50 - 1.00 - 1.50 10267
28 Personnel Department
(APSC)
90 1 - - - 1.80 1.80 460
Total 103 1329.58 18.192 3755.31 1.8 5103.38 4298170
Source: Gender Budget (2015-16)
Further analysis revealed that a performance report for the year 2014-15
(Allocated amount ` 988.21 crore against seven departments) was required to be
2 Budgetary allocations for schemes designed to benefit women to the extent of 100 per cent of allocation. 3 Budgetary allocations for schemes designed to benefit women to the extent of 30 per cent of allocation.
Chapter I-Finances of the State Government
9 Audit Report on State Finances for the year ended 31 March 2016
Total Receipts
(` 64167 crore)
incorporated in the Gender Budget of 2015-16 to ascertain the effectiveness of the
schemes targeted to benefit women. It was, however, noticed that no such report
was incorporated in the Gender Budget of 2015-16.
In the absence of any performance reports/ records, the effectiveness of the
schemes targeted to benefit women under Gender Budgeting could not be
ascertained in audit.
1.2 Resources of the State
1.2.1 Resources of the State as per Annual Finance Accounts
Revenue and Capital are the two streams of receipts that constitute the resources
of the State Government. Revenue Receipts consist of Tax Revenue, Non-Tax
Revenue, State‟s share of Union Taxes and Duties and Grants-in-Aid from GOI.
Capital Receipts comprise miscellaneous Capital Receipts such as proceeds from
disinvestments, recoveries of Loans and Advances, Debt Receipts from internal
sources (market loans, borrowings from financial institutions/commercial banks)
and Loans and Advances from GOI. Besides the funds available in the Public
Accounts after disbursement are also utilised by the Government to finance its
Deficit. The components and sub-components of resources have been shown in
Chart 1.2.
Chart 1.2: Components and sub-components of Resources
Capital Receipts
(` 6008 crore)
Revenue Receipts (` 42457 crore)
Public Accounts
Receipt
(`15702 crore)
Tax
Revenue
(` 10106
crore)
Grants in
Aid from
GOI
(` 12825
crore)
States
Share of
Union
Taxes and
Duties
(` 16785
crore)
Non Tax
Receipts
(`2741
crore)
Debt
Receipts
(` 5498
crore)
Non Debt
Receipts
` 510 crore)
Small Saving,
PF
Reserve Funds
Deposits/
Advances
Suspense/ Misc.
Remittances
Market Loan,
Borrowings,
Loans and
Advances
from GOI
Proceeds from
Disinvestment,
Recoveries of
Loans and
Advances
1. Taxes on Sales,
Trade etc.
2. State Excise,
3. Stamps and
Registration Fees
4. Taxes on
Vehicles etc.
Chapter I-Finances of the State Government
Audit Report on State Finances for the year ended 31 March 2016 10
Table-1.2 presents the receipts and disbursements of the State during the current
year vis-a-vis the previous year as recorded in its Annual Finance Accounts while
Chart 1.3 depicts the trends in various components of the receipts of the State
during 2011-16 and Chart 1.4 depicts the composition of resources of the State
during the current year.
Chart 1.3: Trends in Receipts
27455
4245738181
3221330691
973 13951202 4592 6008
1570217790
149481213812176
48363
6416760563
44224
40604
05000
100001500020000250003000035000400004500050000550006000065000
2011-12 2012-13 2013-14 2014-15 2015-16
( ` i
n c
rore
)
Revenue Receipts Capital Receipts
Public Account Receipts Total Receipts
Chart 1.4: Composition of Receipts during 2015-16 (Rs in crore)
15702
42457
6008
Revenue Receipts Capital Receipts Public Account Receipts
The total receipts of the State Government for 2015-16 was ` 64,167 crore of
which ` 42,457 crore (66 per cent) came from Revenue Receipts and balance
` 27,710 crore (34 per cent) came from Borrowings, Public Account and
recoveries of Loans and Advances. The total receipts of the State increased by
58 per cent from ` 40,604 crore in 2011-12 to ` 64,167 crore in 2015-16. The
share of Revenue Receipts in total receipts of the State decreased by two per cent
from 68 per cent in 2011-12 to 66 per cent in 2015-16. On the other hand, share
of other receipts i.e., Capital Receipts and Public Account Receipts ranged
between 31 and 37 per cent of the total receipts during 2011-16.
Revenue Receipts increased by 55 per cent from ` 27,455 crore in 2011-12 to
` 42,457 crore in 2015-16 whereas Debt Capital Receipts (a component of
Capital Receipts) which create future repayment obligation varied from two to
Chapter I-Finances of the State Government
11 Audit Report on State Finances for the year ended 31 March 2016
nine per cent of total receipts during the period 2015-16 and increased by
` 916 crore (20 per cent) from ` 4,582 crore in 2014-15 to ` 5,498 crore
in 2015-16.
Public Account Receipts refer to those receipts for which the Government acts as
a banker/trustee. It increased steadily from ` 12,176 crore (30 per cent of total
receipts) in 2011-12 to ` 15,702 crore (24 per cent of total receipts) in 2015-16.
1.3 Revenue Receipts
Statement-14 of the Finance Accounts details the Revenue Receipts of the
Government. The Revenue Receipts consist of the State‟s own Tax and Non-Tax
Revenues, Central Tax Transfers and Grants-in-Aid from GOI. The trends and
composition of Revenue Receipts over the period 2011-16 are presented in
Appendix 1.3 and also depicted in Charts 1.5 and 1.6 respectively.
7638
2867
9283
7667
8250
2474
10601
9366
8995
2705
11575
8938
9450
2413
12283
14035
10106
2741
16785
12825
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2011-12 2012-13 2013-14 2014-15 2015-16
( ` i
n c
rore
)
Chart 1.6: The composition of Revenue Receipts during 2011-16
Own Taxes Non-Tax Revenue Central Tax Transfers Grants-in-Aid
Chart 1.5: Trends in Revenue Receipts during 2011-16
16785
30691
27455
32213
38181
42457
10505 1072411700
1186312847
1157512283
1060192837667
936614035
12825
89383000
6000
9000
12000
15000
18000
21000
24000
27000
30000
33000
36000
39000
42000
45000
48000
2011-12 2012-13 2013-14 2014-15 2015-16
( ` i
n c
rore
)
Revenue Receipts (RR) State Own Revenue
Central Tax Transfers Grants-in-Aid
Chapter I-Finances of the State Government
Audit Report on State Finances for the year ended 31 March 2016 12
General Trends:
During 2015-16, Revenue Receipts of the State grew by ` 4,276 crore over
the previous year. The Revenue Receipts of the State showed progressive
increase from ` 27,455 crore in 2011-12 to ` 42,457 crore in 2015-16 with
inter-year fluctuations in the growth rate.
About 30 per cent of the Revenue Receipts during 2015-16 came from
State‟s own resources while Central Tax Transfers and Grants-in-Aid
together contributed 70 per cent. This is indicative of the fact that the
Government of Assam‟s fiscal position is largely influenced by the Tax
Transfers and Grants-in-Aid from GOI.
During 2015-16, Revenue Receipts increased by ` 4,276 crore (11.20 per
cent) over the previous year whereas Revenue Expenditure decreased by `
2,067 crore (5.29 per cent) during the same period. This is an encouraging
sign towards fiscal consolidation of the State.
Tax Revenue constituted 23.80 per cent of the total Revenue Receipts and
increased by ` 656 crore during 2015-16 recording a growth rate of
6.94 per cent over the previous year. The percentage of Tax Revenue to
total Revenue Receipts showed stability and remained in the range of
24 per cent to 28 per cent during 2011-16.
Non-Tax Revenue Receipts constituted 6.46 per cent of the total Revenue
Receipts and increased by ` 328 crore over the previous year. Non-Tax
Revenue as a percentage of Revenue Receipts ranged between six and
10 per cent during 2011-16.
The trends in Revenue Receipts relating to GSDP are presented in Table 1.6.
Table 1.6: Trends in Revenue Receipts relative to GSDP
Parameters 2011-12 2012-13 2013-14 2014-15 2015-16
Revenue Receipts (RR)
(` in crore)
27,455 30,691 32,213 38,181 42,457
Rate of growth of RR (per cent) 19.34 11.79 4.96 18.53 11.20
Rate of growth of Own Taxes
(per cent)
28.80 8.01 9.03 5.06 8.30
RR/GSDP (per cent) 19.18 19.57 18.12 19.27 18.93
Buoyancy Ratios4
Revenue Buoyancy w.r.t GSDP 1.65 1.23 0.37 1.62 0.85
State’s Own Tax Buoyancy w.r.t
GSDP
2.46 0.84 0.68 0.44 0.63
Gross State Domestic Product
(` in crore) (Base year 2011-12)
1,43,175 1,56,864 1,77,745 1,98,098 2,24,234
Rate of growth of GSDP (per cent) 11.73 9.56 13.31 11.45 13.19
Source of GSDP figures: Directorate of Economics and Statistics, Assam
4 Buoyancy ratio indicates the elasticity or degree of responsiveness of a fiscal variable with respect to a
given change in the base variable. For instance, revenue buoyancy with respect to GSDP at 0.85 implies
that Revenue Receipts tend to increase by 0.85 percentage points, if the GSDP increases by one per cent.
Chapter I-Finances of the State Government
13 Audit Report on State Finances for the year ended 31 March 2016
The GSDP at current prices (Base year 2011-12) increased from ` 1,98,098 crore
in 2014-15 to ` 2,24,234 crore in 2015-16 representing an increase
of 13.19 per cent. Ideally growth rate of revenue should be higher than the growth
of GSDP so that over a period of time the Budget can be better balanced. If the
State‟s own taxes are buoyant, then the Government would be in a better position
to plan expenditure and to improve welfare of the people. During the current year,
the State did not achieve this ideal situation as the growth in Revenue Receipts
(11.20 per cent) was less than that of GSDP (13.19 per cent). As a result revenue
buoyancy with respect to GSDP decreased significantly from 1.62 in 2014-15 to
0.85 in 2015-16. But State‟s own tax buoyancy with reference to GSDP showed a
positive sign and increased from 0.44 in 2014-15 to 0.63 in 2015-16.
1.3.1 State’s Own Resources
As the State‟s share in Central Taxes and Grants-in-Aid are determined on the
basis of recommendations of the Finance Commission, collection of Central
Taxes Receipts and Central Assistance for plan schemes etc., the State‟s
performance in mobilization of additional resources should be assessed in terms
of its own resources comprising revenue from its own tax and non-tax sources.
The gross collection in respect of major Taxes and Non-Tax Revenue and their
percentage and also expenditure during 2011-16 are presented in
Appendix 1.3. The State‟s actual Tax and Non-Tax Revenue for the year
2015-16 vis-à-vis assessment made by XIV FC and Medium Term Fiscal Plan
(MTFP) are given in the Table 1.7.
Table 1.7: State’s own Tax Revenue vis-à-vis projections during 2015-16
(` in crore)
Parameters XIV FC
projections
Budget
Estimates
MTFP
projection
Actual
Tax Revenue 13,197 25,648 11,183 10,106
Non-Tax Revenue 3,771 8,652 3,156 2,741
The Tax Revenue of the State in 2015-16 fell short of the assessment of XIV FC
by ` 3,091 crore. It also fell short of Budget Estimates and MTFP projection by
` 15,542 crore and by ` 1,077 crore respectively during the year.
The Non-Tax Revenue of the Government was lesser than the assessment of
XIV FC by ` 1,030 crore. It also fell short of Budget Estimates by ` 5,911 crore
and projection of the State Government in its MTFP by ` 415 crore.
1.3.1.1 Tax Revenue
Gross collection in respect of Tax Revenue for the years 2011-16 is given
component-wise in Table 1.8.
Chapter I-Finances of the State Government
Audit Report on State Finances for the year ended 31 March 2016 14
Table 1.8: Tax Revenue for the years 2011-16
(` in crore)
Heads 2011-12 2012-13 2013-14 2014-15 2015-16
Budget
Estimates
Actual
Taxes on Sales,
Trade, etc.
5,694 6,223 6,848 7,351 19,621 7,494
State Excise 503 568 610 665 1,758 808
Taxes on Vehicle 294 328 351 365 1,011 443
Stamps and
Registration Fees
175 252 252 189 724 225
Land Revenue 140 146 156 142 448 229
Other Taxes5 832 733 778 738 2,086 907
Total 7,638 8,250 8,995 9,450 25,648 10,106 Source: Memorandum of Budget Estimates & Finance Accounts
The Tax Revenue of the State increased from ` 7,638 crore in 2011-12 to
` 10,106 crore in 2015-16 at an annual average rate of 11.57 per cent. During the
current year, the maximum share of Tax Revenue was contributed by Taxes on
Sales, Trade etc., (74.15 per cent).
1.3.1.2 Non-Tax Revenue
Gross collection in respect of Non-Tax Revenue for the years 2011-16 is given
component-wise in Table 1.9.
Table 1.9: Non-Tax Revenue for the years 2011-16
(` in crore)
Heads 2011-12 2012-13 2013-14 2014-15 2015-16
Budget
Estimates
Actual
Interest receipts,
dividends and profits
490 522 431 330 1,061 369
General Services 89 102 191 388 471 416
Social Services 27 31 30 29 73 75
Economic Services 2,261 1,819 2,053 1,666 7,047 1,881
Total 2,867 2,474 2,705 2,413 8,652 2,741
Source: Memorandum of Budget Estimates & Finance Accounts.
The Non-Tax Revenue, which ranged between six and 10 per cent of total
Revenue Receipts of the State during the last five years increased by ` 328 crore
(14 per cent) in 2015-16 over the previous year. During the current year, major
contributors of Non-Tax Revenue were Petroleum Concession fees and Royalties
(` 1,672 crore), Interest Receipts (` 299 crore), Other Administrative Services
(` 329 crore) and Forestry and Wild life (` 117 crore).
5 Other Taxes include taxes on agricultural income, taxes on professions, trades, callings and employment,
taxes on goods and passengers, taxes and duties on electricity and other taxes and duties on commodities
and services.
Chapter I-Finances of the State Government
15 Audit Report on State Finances for the year ended 31 March 2016
1.3.2 Grants-in-Aid from Government of India
The details of Grants-in-Aid received from GOI during 2011-16 are given
in Table 1.10.
Table 1.10: Grants-in-Aid from GOI
(` in crore)
Head 2011-12 2012-13 2013-14 2014-15 2015-16
Non-Plan Grants 962 1,422 681 1,491 3,330
Grants for State Plan Schemes 4,759 5,996 6,059 12,376 8,737
Grants for Central Plan
Schemes
19 46 30 19 572
Grants for Centrally Sponsored
Schemes
1,875 1,860 2,103 17 15
Grants for Special Plan
Schemes
52 42 65 132 171
Total 7,667 9,366 8,938 14,035 12,825
Percentage of increase over
previous year
13.87 22.16 (-) 4.57 57.03 (-) 8.62
Percentage of Revenue Receipts 28 31 28 37 30
Grants-in-Aid from GOI decreased by ` 1,210 crore (nine per cent) from
` 14,035 crore in 2014-15 to ` 12,825 crore in 2015-16. Within the Plan Grants,
while grants for Central Plan Schemes and Special Plan Schemes increased by
` 553 crore and ` 39 crore (30 per cent) respectively, whereas State Plan Schemes
and Central Sponsored Schemes decreased by ` 3,639 crore (29 per cent) and `
two crore (12 per cent) respectively during the year. However, Non-Plan Grants
increased significantly by ` 1,839 crore (123.34 per cent) from ` 1,491 crore in
2014-15 to ` 3,330 crore in 2015-16.
The significant increase in Central Plan Schemes was mainly due to new
allocation of funds under Special Assistance for State Securities (` 551 crore).
The Non-Plan grants (` 3,330 crore) to the State constituted 25.96 per cent of the
total grants during the year of which ` 2,530 crore (75.98 per cent) was provided
under the proviso to Article 275 (1) of the Constitution to cover deficit on
Revenue Account ` 2,191 crore and Grants-in-Aid to local bodies (` 339 crore).
Other components of non-plan grants were (i) grants towards contribution to State
Disaster Response Fund (SDRF) (` 414 crore), (ii) grants for compensation for
loss of revenue on account of CST/VAT (` 230 crore) and (iii) grants for Security
Related Expenditure (` 140 crore).
1.3.3 Central Tax transfer
Central Tax transfers increased significantly by ` 4,502 crore from ` 12,283
crore in 2014-15 to ` 16,875 crore in 2015-16 and constituted 40 per cent of the
Revenue Receipts during the year. Increase in Central Tax transfers during the
Chapter I-Finances of the State Government
Audit Report on State Finances for the year ended 31 March 2016 16
current year was due to higher devolution in the share of net proceeds of Union
Taxes recommended by the XIV FC.
The increase in Central Tax Transfer by ` 4,502 crore (37 per cent) was mainly
due to increase in Corporation Tax (` 983 crore), Taxes on income other than
Corporation Tax (` 590 crore), Customs (` 702 crore), Union Excise Duties (`
1,128 crore) and Service Tax (` 1,093 crore).
1.3.4 Fourteenth Finance Commission Grants
XIV FC in its award period (2016-20) recommended grants to states in respect of
certain Sectors. Accordingly, GOI released grants to the State in respect of
various sectors during 2015-16. Table 1.11 compares the extent of grants which
was given to the State by GOI during the last two years i.e., 2014-15 (last year of
award period of XIII FC) and 2015-16 (1st year of award period of XIV FC).
Table 1.11: Sector-wise position of Grants-in-Aid released as
recommended by the XIII and XIV Finance Commissions
(` in crore)
Sl
No.
Sectors XIII FC
(for the year 2014-15)
XIV FC
(for the year 2015-16)
Increase/
Decrease
PRIs ULBs Total PRIs ULBs Total
1 General Basic
Grants
263.74 39.24 302.98 292.40 46.57 338.97 35.99
2 Special Areas Basic
Grants
6.80 0.50 7.30 -- -- -- --
Total 270.54 39.74 310.28 292.40 46.57 338.97 28.69
Source of data: Finance (Economic Affairs) Department, GOA
It can be seen from the above table that during 2015-16, XIV FC had
recommended ` 35.99 crore more than the XIII FC under the component of
General Basic Grants. However, there was no award under the component of
Special Areas Basic Grants during 2015-16.
1.3.5 Cost recovery in supply of merit goods and services
The current levels of cost recovery (non-tax Revenue Receipts as a percentage of
Non-Plan Revenue Expenditure) in supply of merit goods6 and services of three
selected Socio-Economic Services by Government are depicted in Table 1.12.
6. Merit goods are commodities that the public sector provides free or at subsidised rates because
an individual or society should have them on the basis of some concept of need, rather than ability
and willingness to pay the Government and therefore wishes to encourage their consumption.
Chapter I-Finances of the State Government
17 Audit Report on State Finances for the year ended 31 March 2016
Table 1.12: Cost recovery: 2015-16
(` in crore)
Parameters Non-Tax Revenue
Receipts
Non-Plan Revenue
Expenditure
Cost Recovery
(per cent)
Water Supply & Sanitation 1.71 586.96 0.30
Roads & Bridges 28.69 1,161.89 2.47
Minor Irrigation 0.26 345.40 0.08
As can be seen from above table, the cost recovery for Roads and Bridges during
2015-16 was 2.47 per cent and the same for Water Supply & Sanitation and
Minor Irrigation were 0.30 and 0.08 respectively. Cost recovery from Social
Services is expected to be lower than that of Economic Services. It was revealed
from above table that compared to 2010-117, the cost recovery had increased
marginally in Water Supply & Sanitation under Social Services whereas it had
reduced in Roads and Bridges and Minor Irrigation under Economic Services in
2015-16. Incremental increase in user charges would facilitate sustainable
provision of these Services over a period of time.
1.3.6 Evasion of taxes
The Finance (Taxation) Department had detected 2,033 cases of evasion of Taxes
and raised additional demand of ` 13.40 crore during 2015-16.
1.4 Capital Receipts
The following table shows the trends in growth and composition of Capital
Receipts.
Table 1.13: Trends in growth and composition of Capital Receipts
(` in crore)
Sources of State’s Receipts 2011-12 2012-13 2013-14 2014-15 2015-16
Capital Receipts 973 1,395 1,202 4,592 6,008
Miscellaneous Capital Receipts -- -- -- -- --
Recovery of Loans and Advances 21 7 6 10 510
Public Debt Receipts 952 1,388 1,196 4,582 5,498
Rate of growth of Debt Capital
Receipts
(-) 53.45 45.80 (-) 13.83 283.11 19.99
Rate of growth of Non-Debt Capital
Receipts
(-) 25 (-) 66.67 (-) 14.29 66.67 5000.00
Rate of growth of GSDP 11.73 9.56 13.31 11.45 13.19
Rate of growth of Capital Receipts
(per cent)
(-) 53.06 (+) 43.37 (-) 13.84 (+) 282.03 (+) 30.84
Capital Receipts increased by more than 517 per cent from ` 973 crore in
2011-12 to ` 6,008 crore in 2015-16. During the current year the Capital Receipts
increased by ` 1,416 crore (31 per cent). Public Debt Receipts which create
7 Water Supply & Sanitation: 0.29 per cent; Roads & Bridges: 12.01 per cent and Minor
Irrigation: 0.15 per cent.
Chapter I-Finances of the State Government
Audit Report on State Finances for the year ended 31 March 2016 18
future repayment obligation varied between two to nine per cent of total receipts
during the period 2011-16 and increased considerably by ` 916 crore
(20 per cent) from ` 4,582 crore in 2014-15 to ` 5,498 crore in 2015-16.
During the current year rate of growth of both Debt and Non-Debt Capital
Receipts remained positive and stood at 5,000 per cent and 19.99 per cent
respectively.
During the period 2011-16, the rate of growth of Debt Capital Receipts remained
positive except for the years 2011-12 and 2013-14. However, during the current
year it decreased significantly from 283.11 per cent in 2014-15 to 19.99 per cent
in 2015-16. Rate of growth of GSDP increased marginally from 11.45 per cent in
2014-15 to 13.19 per cent in 2015-16.
1.5 Public Account Receipts
Receipts and Disbursements in respect of certain transactions such as small
Savings, Provident Funds, Reserve Funds, Deposits, Suspense, Remittances etc.,
which do not form part of the Consolidated Fund, are kept in the Public Account
set up under Article 266(2) of the Constitution and are not subject to vote by the
State Legislature. Here the Government acts as a banker. The balance after
disbursements during the year is the fund available with the government for use.
The trends in growth and composition of Public Account Balances are given in
Table 1.14.
Table 1.14: Trends in growth and composition of Public Account Balances
(` in crore)
Resources under various Heads 2011-12 2012-13 2013-14 2014-15 2015-16
Public Account Balances 1,939.38 1,229.55 1,671.44 1,413.44 (-) 191.93
a. Small Savings, Provident Fund
etc.
634.98 807.52 837.17 890.13 860.14
b. Reserve Fund 901.23 201.08 543.44 818.51 230.02
c. Deposits and Advances 437.17 413.21 157.47 (-) 233.54 (-) 1,005.83
d. Suspense and Miscellaneous 16.84 (-) 156.99 123.04 (-) 91.92 (-) 228.60
e. Remittances (-) 50.84 (-) 35.27 10.32 30.26 (-) 47.66
Public Account Balances of the Government decreased significantly from
` 1,939.38 crore in 2011-12 to ` (-) 191.93 crore in 2015-16 at an annual average
rate of 22 per cent. During the current year also, the balances decreased by
` 1,605.37 crore (114 per cent) as compared to 2014-15.
1.6 Application of Resources
Analysis of the allocation of expenditure at the State Government level assumes
significance since major expenditure responsibilities are entrusted with them.
Within the framework of fiscal responsibility legislations, there are budgetary
constraints in raising public expenditure financed by deficit or borrowings. It is
Chapter I-Finances of the State Government
19 Audit Report on State Finances for the year ended 31 March 2016
therefore, important to ensure that the ongoing fiscal correction and consolidation
process at the State level is not at the cost of expenditure especially expenditure
directed towards development of Social Sectors.
1.6.1 Growth and composition of expenditure
The total expenditure and its composition during the years 2011-12 to 2015-16
are presented in Table 1.15.
Table 1.15: Total expenditure and its compositions
(` in crore)
Parameters 2011-12 2012-13 2013-14 2014-15 2015-16
Total Expenditure 29,122 32,215 36,001 43,621 39962
Revenue Expenditure 26,528 29,137 31,990 39,078 37,011
Of which, Non-Plan Revenue
Expenditure
20,041 22,642 24,962 29,687 27,576
Capital Expenditure 2,506 2,617 3,189 3,912 2691
Loans and Advances 88 461 822 631 260
Chart 1.7 presents the trends in total expenditure over a period of five years
(2011-16) and its composition both in terms of „economic classification‟ and
„expenditure by activities‟ is depicted in Charts 1.8 and 1.9 respectively.
Chart 1.7: Total Expenditure: Trends and Composition
3701139078
31990
26528 29137
20041
22642
24962
29687
27576
269126172506 3189 3912
822
88
461
631 260
43621
25024
36001
3221529122
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
2011-12 2012-13 2013-14 2014-15 2015-16
(`
in
cro
re)
Revenue Expenditure Non-Plan Revenue Expenditure
Capital Expenditure Loans and Advances
Total Expenditure
Chapter I-Finances of the State Government
Audit Report on State Finances for the year ended 31 March 2016 20
The total expenditure of the State increased by 37 per cent from ` 29,122 crore in
2011-12 to ` 39,962 crore in 2015-16. The total expenditure, its annual growth
rate, the ratio of expenditure to the State GSDP and to Revenue Receipts and its
buoyancy with respect to GSDP and Revenue Receipts are indicated in
Table 1.16.
Table 1.16: Total expenditure – basic parameters
Parameters 2011-12 2012-13 2013-14 2014-15 2015-16
Total Expenditure (TE) (` in crore) 29,122 32,215 36,001 43,621 39,962
Rate of growth (per cent) 16.38 10.62 11.75 21.17 (-) 8.39
TE/GSDP ratio (per cent) 20.34 20.54 20.25 22.02 17.82
RR/TE ratio (per cent) 94.28 95.27 89.48 87.53 106.24
Rate of Growth of GSDP 11.73 9.56 13.31 11.45 13.19
Buoyancy of Total Expenditure with reference to:
GSDP (ratio) 1.40 1.11 0.88 1.85 (-) 0.69
RR (ratio) 0.85 0.90 2.37 1.14 (-) 0.82
The decrease of ` 3,659 crore (8.39 per cent) in total expenditure in 2015-16 was
due to decrease of ` 2,067 crore in Revenue Expenditure, ` 1,221 crore in Capital
Expenditure and ` 371 crore in disbursement of Loans and Advances.
The components of Services of Revenue Expenditure which recorded
decrease were mainly as under:
(A) General Services:
Secretariat-General Services (` 302 crore) - The decrease was mainly
due to refund of unutilized fund pertaining to earlier years by Secretariat
Administration (Accounts).
Chapter I-Finances of the State Government
21 Audit Report on State Finances for the year ended 31 March 2016
Public Works (` 262 crore) – The decrease was mainly due to decline in
expenditure of School Buildings, Civil Hospitals etc., and payment of
Muster Roll Staff.
(B) Social Services:
Welfare of Scheduled Castes, Scheduled Tribes, Other Backward
Classes and Minorities (` 352 crore) - The decrease was recorded under
Assam State Development Council for Scheduled Caste, Assistance for
implementation of Family oriental income and Infrastructure Development
Project under Tribal Sub-Plan (TSP).
Relief on Account of Natural Calamities (330 crore) – The decrease
was due to decline in expenditure under (i) Rehabilitation Grants (Flood)
and Gratuitous Relief (Flood) and repairs and restoration of damaged
Roads and Bridges due to floods.
(C) Economic Services:
Secretariat – Economic Services (` 141 crore) - The decrease in
expenditure under this component was mainly under (i) special projects,
(ii) Evaluation and Monitoring Division and (iii) Refund of unutilized
funds of earlier years.
(D) Grants-in-Aid and Contribution:
Compensation & Assignment to Local Bodies & Panchayati Raj
Institutions (` 618 crore) - The decrease in expenditure was mainly due
to decline in expenditure under District Panchayat and Municipalities from
the share of net proceeds of State Own Taxes assigned under
recommendation by State Finance Commission.
The decrease in Capital expenditure by 31 per cent (` 1,221 crore) during
2015-16 was mainly due to decrease in expenditure on Capital outlay on
Flood Control Projects by ` 297 crore, Capital outlay on Public Works
by ` 59 crore and Capital outlay on Telecommunication and Electronic Industries
by ` 47 crore.
The pattern of total expenditure in the form of plan and non-plan expenditure
during 2015-16 revealed that non-plan expenditure contributed dominant share of
76 per cent while the plan expenditure was 24 per cent.
Total expenditure exhibited negative growth during the current year as it
decreased from 21.17 per cent in 2014-15 to (-) 9.17 per cent 2015-16. The
increase in ratio of Revenue Receipts to total expenditure from 87.53 per cent in
2014-15 to 106.25 per cent in 2015-16 was mainly the result of significant
increase of ` 4,502 crore in State‟s share in Union Taxes and Duties during
2015-16 over 2014-15. The buoyancy of total expenditure with reference to
Chapter I-Finances of the State Government
Audit Report on State Finances for the year ended 31 March 2016 22
GSDP however, decreased and turned negative to (-) 0.69 during 2015-16 due to
decrease in the rate of growth of total expenditure as compared to increase in the
rate of growth of GSDP. Similarly, the buoyancy ratio of total expenditure to
Revenue Receipts at (-) 0.82 in 2015-16 indicated increase in the receipt at a pace
greater than that of expenditure.
1.6.2 Trends in total expenditure in terms of activities
In terms of activities, total expenditure could be considered as being composed of
expenditure on General Services including Interest Payments, Social and
Economic Services, Grants-in-Aid and Loans and Advances. Relative share of
these components in the total expenditure (` 39,962 crore) (refer Chart 1.7 and
Appendix 1.3) are indicated in Table 1.17.
Table 1.17: Components of expenditure – relative share
(In per cent)
Parameters 2011-12 2012-13 2013-14 2014-15 2015-16
General Services 33.69 33.13 30.70 29.93 31.86
Of which, Interest Payments 7.12 6.56 6.11 5.35 6.55
Social Services 39.93 39.71 41.79 42.77 45.88
Economic Services 23.83 23.43 24.18 23.58 20.67
Grants-in-Aid 2.25 2.30 1.05 2.28 0.94
Loans and Advances 0.30 1.43 2.28 1.46 0.65
The relative share of the above components of expenditure indicated that the
share of General Services and Social Services in the total expenditure increased
during 2015-16 over the previous year. These increases were set off by decreases
in the respective share of Economic Services, Grants-in-Aid and Loans and
Advances.
The expenditure on General Services, which are considered as non-
developmental, increased from 29.93 per cent in 2014-15 to 31.86 per cent in
2015-16. On the other hand, Developmental Expenditure i.e., expenditure on
Social and Economic Services together accounted for 66.55 per cent in 2015-16
which was approximately equivalent to 66.35 per cent in 2014-15. This indicates
that while there was increase in Non-Developmental Expenditure, the
Developmental Expenditure remained constant in the current year as compared to
previous year.
1.6.3 Revenue Expenditure
Revenue Expenditure had predominant share in total expenditure. Revenue
Expenditure is incurred to maintain the current level of services and payment for
the past obligation and as such does not result in any addition to the State‟s
infrastructure and service network. Revenue Expenditure had the predominant
share of 91 per cent in the total expenditure during the period 2011-16. The
Chapter I-Finances of the State Government
23 Audit Report on State Finances for the year ended 31 March 2016
overall Revenue Expenditure, its rate of growth, the ratio of Revenue Expenditure
(non-plan) to GSDP, to total expenditure and to Revenue Receipts and its
buoyancy is indicated in Table 1.18.
Table 1.18: Revenue Expenditure – basic parameters
(` in crore)
Parameters 2011-12 2012-13 2013-14 2014-15 2015-16
Total Expenditure (TE) 29,122 32,215 36,001 43,621 39,962
Revenue Expenditure (RE), of which 26,528 29,137 31,990 39,078 37,011
Non-Plan Revenue Expenditure (NPRE) 20,041 22,642 24,962 29,687 27,576
Plan Revenue Expenditure (PRE) 6,487 6,495 7,028 9,391 9,435
Rate of Growth of
RE (per cent) 15.58 9.83 9.79 22.16 -5.29
NPRE (per cent) 11.99 12.98 10.25 18.93 -7.11
PRE (per cent) 28.30 0.12 8.21 33.62 0.47
Revenue Expenditure as percentage to
TE
91.09 90.45 88.86 89.59 92.62
NPRE/GSDP (per cent) 14.00 14.43 14.04 14.99 12.30
NPRE as percentage of TE 68.82 70.28 69.34 68.06 69.01
NPRE as percentage of RR 73.00 73.77 77.49 77.75 64.95
Buoyancy of Revenue Expenditure with
GSDP (ratio) 1.33 1.03 0.74 1.94 -0.40
Revenue Receipts (ratio) 0.81 0.83 1.97 1.20 -0.47
The overall Revenue Expenditure of the State increased by 39.52 per cent
from ` 26,528 crore in 2011-12 to ` 37,011 crore in 2015-16 at an annual average
rate of 7.90 per cent. But during 2015-16 it showed a declining trend and
decreased by ` 2,067 crore (5.29 per cent).
Out of the Revenue Expenditure, Non-Plan Revenue Expenditure (NPRE)
constituted a dominant share of nearly 75 per cent during the last five-year period
i.e., 2011-16 and decreased by ` 2,111 crore (7.11 per cent) during the current
year over the previous year. The decrease in NPRE during the current year was
mainly due to decrease in expenditure in (i) Miscellaneous General Services (`
921 crore), Compensation and Assignment to Local Bodies (` 618 crore), Relief
on account of Natural Calamities (` 330 crore), Public Works
(` 264 crore), General Education (` 270 crore), Welfare of Scheduled Caste,
Scheduled Tribes and Other Backward Classes (` 253 crore), Water Supply and
Sanitation (` 146 crore), Power (` 111 crore), Roads and Bridges (` 99 crore),
Crop Husbandry (` 85 crore), Social Security & Welfare (` 76 crore) and Flood
Control and Drainage (` 54 crore). The decreases were however, offset by
increase in Pension and other Retirement Benefits (` 748 crore), Interest Payment
(` 285 crore) and Elections (` 152 crore).
The Plan Revenue Expenditure (PRE) increased nominally by ` 44 crore (0.47
per cent) from ` 9,391 crore in 2014-15 to ` 9,435 crore in 2015-16.
Chapter I-Finances of the State Government
Audit Report on State Finances for the year ended 31 March 2016 24
The buoyancy of Revenue Expenditure with reference to both GSDP and
Revenue Receipts fluctuated during 2011-16. Buoyancy ratio of Revenue
Expenditure with respect to both GSDP and Revenue Receipts decreased
significantly and became negative during the year. This was positive sign towards
fiscal consolidation as it indicated that both GSDP and Revenue Receipts of the
State increased at a pace faster than the Revenue Expenditure.
Table 1.19 provides the comparative position of Non-Plan Revenue Expenditure
(NPRE) with reference to assessment made by the State Government in its budget
during 2015-16.
Table 1.19: Comparative position of Non-Plan Revenue Expenditure vis-a-vis
projections of the State Government in its budget
(` in crore)
Year Budget Estimates
(2015-16)
Revised Estimates
(2015-16)
Actual
2015-16 34,677 38,531 27,576
The NPRE was lower than the projections of the State Government made in its
Budget Estimates as well as in Revised Estimates during 2015-16.
1.6.4 Committed Expenditure
The committed expenditure of the State Government on revenue account mainly
consists of interest payments, expenditure on salaries and wages, pension and
subsidies. Table 1.20 and Chart 1.10 present the trends in the expenditure on
these components during 2011-16.
Table 1.20: Components of Committed Expenditure
(` in crore)
Components of Committed
Expenditure
2011-12 2012-13 2013-14 2014-15 2015-16
Salaries & Wages, Of which 11,793 13,442 15,814 17,829 18,758
Non-Plan Head 11,094 12,575 14,999 16,853 18485
Plan Head* 699 867 815 976 273
Expenditure on Pensions 3,136 3,779 4,264 5,237 5,985
Interest Payments 2,074 2,115 2,198 2,334 2,618
Subsidies 72 80 81 58 19
Total 17,075 19,416 22,357 25,458 27,380
As per cent of RR
Salaries & Wages 42.95 43.80 49.09 46.69 44.18
Expenditure on Pensions 11.42 12.31 13.24 13.72 14.10
Interest Payments 7.55 6.89 6.82 6.11 6.17
Subsidies 0.26 0.26 0.25 0.15 0.04
Source: Finance Accounts
* Plan Head includes the salaries paid under Centrally Sponsored Schemes
Chapter I-Finances of the State Government
25 Audit Report on State Finances for the year ended 31 March 2016
58.84
15.65
10.35
0.3614.80
59.37
16.69
9.34
0.3514.25
63.35
17.08
8.80
0.3210.45
60.06
17.64
7.86
0.2014.24
68.50
21.70
9.49
0.070.72
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%S
ha
re i
n p
er c
ent
2011-12 2012-13 2013-14 2014-15 2015-16
Y e a r
Chart 1.10: Share of Committed Expenditure in Non-Plan Revenue
Expenditure during 2011-16
Salary & Wages Expenditure on Pension Interest payment Subsidies Others
(A) Salary and Wage expenditure
Salaries and Wages alone accounted for nearly 44 per cent of Revenue Receipts
of the State during 2015-16. It increased by five per cent from ` 17,829 crore in
2014-15 to ` 18,758 crore in 2015-16. Salary and Wage expenditure under
Non-Plan head during 2015-16 increased by ` 1,632 crore (9.68 per cent) over
the previous year whereas the same on plan head decreased by ` 703 crore
(72.03 per cent) over the previous year. Non-Plan Salary and Wage expenditure
ranged between 94 per cent and 99 per cent of total expenditure on Salaries and
Wages during 2011-16. Although expenditure on Salaries (` 18,485 crore) during
2015-16 was less by ` 5,234 crore (28 per cent) than assessed (` 23,719 crore) by
the State Government in its budget, it was more by ` 527 crore (three per cent)
than the projection of ` 17,958 crore made in MTFP.
(B) Interest Payments
Interest Payments increased by ` 284 crore (12.17 per cent) from ` 2,334 crore in
2014-15 to ` 2,618 crore in 2015-16. During the current year the
Interest Payments was made on internal debt (` 1,861 crore), Small
Savings, Provident Fund etc., (` 646 crore) and Loans and Advances
from Central Government (` 111 crore).
The Interest Payments with reference to assessment made by the XIV FC and the
projections of the State Government in its Budget and MTFP (Table 1.21)
indicate that the State Government was by and large successful in restricting the
Interest Payments within the assessments of XIV FC and State projections during
2015-16.
Chapter I-Finances of the State Government
Audit Report on State Finances for the year ended 31 March 2016 26
Table 1.21: Interest Payments vis-à-vis Fourteenth Finance Commission
assessment and State Projections (` in crore)
Year Assessment made by
the XIV FC
Assessment made by the State
Government in
Actual
Budget MTFP
2015-16 2,602 2,612 2,612 2,618
The major sources of borrowings of the State Government were (i) Loans from
National Small Savings Fund of Central Government, (ii) Loans from the Banks
and Financial Institutions, (iii) Loans from the Centre and (iv) Loans from Small
Savings and Provident Funds.
During 2015-16, the State Government raised ` 1,897 crore from open market.
Further, the Government also borrowed an amount of ` 398 crore from National
Bank for Agriculture and Rural Development (NABARD), ` 1,900 crore from
National Small Savings Fund (NSSF) and ` 50 crore from GOI.
(C) Pension Payments
Pension Payments increased from ` 3,136 crore in 2011-12 to ` 5,985 crore in
2015-16 recording a total increase of 91 per cent in five years. Pension Payments
alone accounted for more than 14 per cent of Revenue Receipts of the State
during the year and increased by ` 748 crore (14.28 per cent) over the previous
year. Increase of ` 748 crore in Pension Payments during 2015-16 over the
previous year was mainly due to increase in expenditure under Superannuation
and Retirement Allowances (` 727 crore) and Commuted value of Pension
(` 77 crore).
The State Government had introduced „The New Defined Contribution Pension
Scheme‟ applicable to all new entrants joining State Government Service on
regular basis against vacant sanctioned post(s) on or after 1 February 2005 in
order to limit future pension liabilities. The New Pension Scheme was however,
implemented provisionally in the State with effect from January 2010. In terms of
the scheme, employees contribute 10 per cent basic pay and dearness allowance,
which is matched by the State Government and the entire amount, is transferred
to the designated fund manager through the National Securities
Depository Limited (NSDL). During 2015-16, the State Government contributed
` 352.51 crore to the Scheme against employee‟s contribution of ` 334.80 crore.
Table 1.22 below shows the actual pension payments with reference to
assessment made by the XIV FC and projections of the State Government.
Chapter I-Finances of the State Government
27 Audit Report on State Finances for the year ended 31 March 2016
Table 1.22: Actual Pension Payments vis-à-vis XIV FC assessment
and State Projections
(` in crore)
Year Assessment made by the
XIV FC
Assessment made by the State
Government in
Actual
Budget MTFP
2015-16 3,860 6,191 5,160 5,985
Pension Payments was ` 2,125 crore (55.05 per cent) more than the assessments
of XIV FC, ` 825 crore (15.99 per cent) more than the projections made by the
State Government in its MTFP. However, it was less by ` 206 crore (three per
cent) than the estimates made in its budget during 2015-16.
(D) Subsidies
Table 1.20 indicates that subsidies as a percentage of Revenue Receipts
decreased further from 0.15 per cent in 2014-15 to 0.04 per cent in 2015-16. In
absolute terms, expenditure on payment of subsidies decreased from ` 58 crore in
2014-15 to ` 19 crore in 2015-16. During 2015-16 the major Departments which
received subsidy were Industries and Commerce (` 18.76 crore) and Hill Areas
Department (` 0.26 crore). The State Government had not made any projection
for subsidy in its MTFP during 2015-16.
1.6.5 Financial Assistance by State Government to Boards and
other institutions
The quantum of assistance provided by way of grants and loans to Boards and
others during the current year relative to the previous years is presented
in Table 1.23.
Table 1.23: Financial Assistance to Boards and other institutions
(` in crore)
Financial Assistance to
Institutions
2011-12 2012-13 2013-14 2014-15 2015-16
Final
Grant/
Appropria-
tion
Actual
Municipal
Corporations/Urban
Sewerage Board
112.26 94.37 62.20 93.47 6.73 0
Co-operative Societies and
Co-operative Institutions
1.18 7.88 5.50 12.53 990.83 108.12
Universities and Educational
Institutions
1,602.93 2,239.27 2,760.62 1,267.36 973.17 589.33
Power Companies etc. 69.10 401.43 278.76 652.38 30.25 25.00
Assam State Housing Board
(ASHB) etc.
0.46 2.11 4.58 5.22 0 0
Assam Khadi & Village
Industries Board
21.56 27.01 24.77 23.37 18.97 14.37
Urban Development 10.14 3.58 11.52 23.94 12.80 17.29
Chapter I-Finances of the State Government
Audit Report on State Finances for the year ended 31 March 2016 28
Authority
Autonomous Councils 123.88 404.88 393.42 308.17 823.86 282.67
Other Institutions 175.96 244.45 671.91 329.78 797.56 627.46
Total 2,117.47 3,424.98 4,213.28 2,716.22 3,654.17 1,664.24
Assistance as percentage of
RE
7.98 11.75 13.17 6.95 7.09 4.50
The total assistance at the end of the year 2015-16 had decreased by 39 per cent
over the level of 2014-15. Assistance to Boards and other institutions as a
percentage of total Revenue Expenditure had decreased from 7.98 per cent in
2011-12 to 4.50 per cent in 2015-16. Financial assistance to Educational
Institutions alone constituted more than 35 per cent of the total assistance of the
State Government during 2015-16.
1.6.6 Local Bodies
Major issues relating to Local Bodies, i.e., Panchayati Raj Institutions (PRIs) and
Urban Local Bodies (ULBs) are summarised in the following paragraphs.
1.6.6.1 Classification of Local Bodies
Panchayati Raj Institutions (PRIs): Consequent upon the 73rd
Constitutional
Amendment Act, 1992 the Government of Assam had created the Assam
Panchayati Raj Act (APA) 1994, replacing the Assam Panchayati Raj Act, 1986.
The APA, 1994 provided for a three-tier panchayat system comprising Gram
Panchayat (GP) at the village level, Anchalik Panchayat (AP) at the block level
and Zilla Parishad (ZP) at the district level. As of 31 March 2016,
there were 21 ZPs, 185 APs and 2,202 GPs in the State.
Urban Local Bodies (ULBs): In consonance with the 74th
Constitutional
Amendment Act, 1992 the municipal administration in Assam is based on three
categories of ULBs as noted below:
(i) Town Committee (TC) for a transitional or emerging urban area;
(ii) Municipal Board (MB) for a comparatively small urban area, and
(iii) Municipal Corporation i.e., Guwahati Municipal Corporation (GMC) for
a larger urban area.
As of 31 March 2016, there were 94 ULBs in the State comprising of one
Municipal Corporation, 34 MBs and 59 TCs.
1.6.6.2 Financial Profile of Local Bodies
The quantum of funds from own resources (Local Bodies) and assistances
provided by way of grants to local bodies during 2011-12 to 2015-16 is
presented in Tables 1.24 and 1.25.
Chapter I-Finances of the State Government
29 Audit Report on State Finances for the year ended 31 March 2016
Table 1.24: Resources of PRI
(` in crore)
Source 2011-12 2012-13 2013-14 2014-15 2015-16
Own Revenue (Local Bodies) 87.85 176.16 193.80 213.18 NA
State Finance Commission
(SFC) transfers
227.96 104.42 158.23 298.84 147.36
Central Finance Commission
(CFC) transfers
196.01 362.05 201.93 270.54 292.40
Grants for State sponsored
schemes
520.73 89.09 197.29 147.04 486.00
GOI grants for Centrally
Sponsored Schemes
1,323.36 1,211.38 2,000.58 1,879.94 2,070.00
Total 2,355.91 1,943.10 2,751.83 2,809.54 2,995.76
Source: Commissioner, P & RD, Assam and information furnished by GOA.
NA: Not Available
Table 1.25: Resources of ULBs
(` in crore)
Source 2011-12 2012-13 2013-14 2014-15 2015-16
Own Revenue 151.57 190.04 NA NA NA
SFC transfers 189.68 149.59 133.11 169.07 Nil
CFC transfers 31.97 44.28 Nil 39.74 46.57
Interest for delayed payment of
CFC grants
0.11 0.20 0.12 0.18 Nil
State Sponsored Schemes 16.13 4.14 8.22 12.29 0.31
GOI grants for Centrally
Sponsored Schemes
24.09 33.41 25.57 11.03 14.46
Total 413.55 421.66 167.02 232.31 61.34
Source: FASFC Report and information furnished by the Director, MA and the Director, T & CP, GOA. NA: Not Available
During current year CFC transfers as well as GOI grants for Centrally Sponsored
Schemes increased for both PRIs and ULBs.
1.6.6.3 Devolution of functions, functionaries and fund (3Fs) to
PRIs and ULBs
The 73rd
and 74th
Constitutional amendment gave the constitutional status to PRIs
and ULBs and established a system of uniform structure, holding of regular
elections, regular flow of funds through Finance Commissions, etc. As a follow
up, the States are required to entrust these bodies with such powers, functions and
responsibilities so as to enable them to function as institutions of
self-government. In particular, the PRIs and ULBs are required to prepare plans
and implement schemes for economic development and social justice in respect of
functioning enumerated in the Schedule XI and XII of the Constitution
respectively.
In June 2007, Government of Assam (GOA) issued notification regarding
activity mapping for 23 subjects out of 29 as listed in Schedule XI of the
Constitution for devolution of 3Fs to the PRIs. Following the activity
mapping which defined the functions and functionaries that are to be
devolved to each tier of PRIs, Government orders were issued for
Chapter I-Finances of the State Government
Audit Report on State Finances for the year ended 31 March 2016 30
devolution in respect of only seven subjects out of 23 notified. Orders are
yet to be issued in respect of remaining 16 subjects.
GOA amended (May 2011) the Assam Municipal Act (AMA), 1956, which
provided for transfer of 3Fs to ULBs relating to 18 subjects listed in the
Twelfth Schedule of the Constitution and also for the constitution of a
committee under the Chairmanship of Minister in charge, Urban
Development Department to monitor the matter for early and smooth
transfer of 3Fs.
Thus, the process of decentralisation has just been initiated with the
amendment of AMA.
For devolution of fund, GOA created a panchayat/municipality window in
the State Budget earmarking every year substantial outlays under Plan and
Non-plan in the revenue account for Panchayats and Municipalities. In the
absence of suitable administrative machinery due to non-transfer of 3Fs to
PRIs and ULBs the amount earmarked was spent through the functionaries
of the respective line departments.
Thus, the objective of creating the Panchayat/Municipality window in the
State Budget was frustrated due to lack of effective and prompt action on
the part of the Government to implement its own decisions on devolution of
3Fs to the local bodies.
1.6.6.4 Accounting and Auditing Arrangement
Accounting Arrangement: The GOA accepted the Model Accounting System
prescribed by Ministry of Panchayati Raj (MoPR) in consultation with
the C&AG of India for PRIs and accordingly amended the Assam Panchayat
(Financial) Rules 2002. However, neither the formats for preparation of
Monthly and Annual Accounts as prescribed by the C&AG of India, were
incorporated in the Assam Panchayat (Financial) Rules 2002 nor was any
provision made in the said Rules for preparation and submission of monthly and
annual accounts.
Thus, the accounts of PRIs are not maintained as per the prescribed formats. In
absence of accounts the actual financial position of PRIs could not be ascertained.
Assam Municipal (Accounts) Rules 1961 framed under AMA, 1956, provides for
maintenance of accounts of municipalities on cash basis and does not prescribe
formats for preparation of annual accounts by ULBs. The State Government, in
the line of National Municipal Accounting Manual (NMAM), prepared the
draft Assam Municipal Accounting Manual (AMAM) in July 2010, which is
based on accrual based accounting system and amended the AMA, 1956 in May
2011, to provide for maintenance of accounts on accrual basis and preparation of
Chapter I-Finances of the State Government
31 Audit Report on State Finances for the year ended 31 March 2016
Receipt and Payment Accounts, Income and Expenditure Account and the
Balance Sheet.
However, the accounts of ULBs continued to be maintained on cash basis and
thereby true and fair view of financial affairs of ULBs and their assets and
liabilities were not disclosed.
Auditing Arrangement: As per recommendation of XIII FC, the GOA had
entrusted the audit of accounts of PRIs and ULBs to the C&AG of India under
Section 20 (1) of the C&AG‟s (DPC) Act, 1971 under standard terms and
conditions of Technical Guidance and Support (TGS) module (May 2011).
Accordingly, the C&AG of India conducts audit of PRIs and ULBs in the State.
1.6.6.5 Reporting Arrangement
Audit findings of test-check of accounts of LBs conducted by the C&AG of India
are presented in the form of Annual Technical Inspection Reports (ATIRs).
ATIRs on PRIs and ULBs for the years 2004-05 to 2012-13 have been submitted
to the State Government. It was for the first time that ATIR for the year 2009-10
was laid before the State Legislature in December 2011. The latest Audit Report
for the year 2014-15 was laid before the State Legislature on 18 July 2016.
Government of Assam had constituted (October 2012) Local Fund
Accounts Committee (LFAC) to discuss the ATIRs on PRIs and ULBs.
In September 2016, Audit Report on Local Bodies (earlier known as ATIR) for
the year 2013-14 was discussed by the LFAC. Moreover, Action Taken Report
(ATR) on the ATIRs/Audit Report submitted to Government was still awaited
(November 2016).
1.7 Quality of Expenditure
The availability of better social and physical infrastructure in the State generally
reflects the quality of its expenditure.
1.7.1 Adequacy of Expenditure Use
In view of the importance of public expenditure on development heads from the
point of view of Social and Economic development, it is important for the State
Governments to take appropriate expenditure rationalisation measures and lay
emphasis on provision of core public and merit goods. Apart from improving the
allocation towards Development Expenditure8, particularly in view of the fiscal
space being created on account of decline in debt servicing in recent years, the
efficiency of expenditure use is also reflected by the ratio of Capital Expenditure
8 The analysis of expenditure data is disaggregated into development and non-Development Expenditure.
All expenditure relating to Revenue Account, Capital Outlay and Loans and Advances is categorised into
Social Services, Economic Services and General Services. Broadly, the Social and Economic services
constitute Development Expenditure, while expenditure on General Services is treated as non-
Development Expenditure.
Chapter I-Finances of the State Government
Audit Report on State Finances for the year ended 31 March 2016 32
to total expenditure (and/or GSDP) and proportion of Revenue Expenditure
being spent on operation and maintenance of the existing Social and Economic
Services. The higher the ratio of these components to total expenditure (and/or
GSDP), the better would be the quality of expenditure.
Table 1.26 compares the fiscal priority of the State Government with that of
Special Category States regarding Development Expenditure, Social Sector
Expenditure, Economic Sector Expenditure and Capital Expenditure
during 2015-16, taking 2012-13 as base year.
Table 1.26: Fiscal Priority of the State in 2012-13 and 2015-16
(In per cent)
Fiscal Priority of the State AE/
GSDP
SSE/
AE
ESE/
AE
DE/
AE
CE/
AE
Education
/AE
Health/
AE
Average (Ratio) 2012-13 of
Special Category States 22.23 38.42 31.50 69.92 15.53 20.86 5.58
Assam 20.54 39.73 24.84 64.56 8.12 24.12 5.25
Average (Ratio) 2015-16 of
Special Category States 21.66 39.78 30.63 70.41 13.95 20.63 6.41
Assam 17.82 45.88 21.31 67.20 6.73 26.80 7.15
AE: Aggregate Expenditure; DE: Development Expenditure; SSE: Social Sector Expenditure; ESE:
Economic Sector Expenditure; CE: Capital Expenditure.
Table 1.26 reveals that Development Expenditure as a ratio of aggregate
expenditure of the State of Assam was less than that of Special Category States
(SCS) during both the years 2012-13 and 2015-16. Capital Expenditure during the
same period was also less than that of SCS, which is a matter of concern.
However, expenditure on education was more than that of SCS in both the years
and the expenditure on health was more in 2015-16 only.
Further, Table 1.27 presents the trends in Development Expenditure relative to
the aggregate expenditure of the State during the current year vis-à-vis budgeted
and the previous years while Table 1.28 provides the details of Capital
Expenditure and the components of Revenue Expenditure incurred on the
maintenance of the selected Social and Economic Services.
Table 1.27: Development Expenditure (` in crore)
Components of
Development Expenditure
2011-12 2012-13 2013-14 2014-15 2015-16
BE Actual
Development Expenditure
(a to c)
18,655
(64)
20,803
(65)
24,571
(68)
29,572
(68)
46,365
(75)
26,855
(67)
a. Development Revenue
Expenditure
16,129
(55)
17,827
(55)
20,686
(57)
25,163
(58)
36,176
(59)
23,980
(60)
b. Development Capital
Expenditure
2,438
(8)
2,515
(8)
3,063
(9)
3,778
(9)
9,413
(15)
2,615
(6)
c. Development Loans
and Advances
88
(1)
461
(2)
822
(2)
631
(1)
776
(1)
260
(1)
Figures in parentheses indicate percentage to aggregate expenditure
The share of Development Expenditure to aggregate expenditure exhibited
relative stability during the period 2011-16. However, in absolute term,
Chapter I-Finances of the State Government
33 Audit Report on State Finances for the year ended 31 March 2016
Development Expenditure decreased in 2015-16 by ` 2,717 crore (nine per cent)
over the previous year. During the current year, the State Government earmarked
75 per cent of the estimated aggregate expenditure for Development Expenditure
and this assessment was not achieved at the end of the year. The relative share of
Development Expenditure to total expenditure during 2011-16 is presented in
Chart 1.11.
16
12
9
24
38
88
17
82
7
25
15
46
1
20
68
6
30
63
82
2
25
16
3
37
78
63
1
36
17
6
94
13
77
6
23
98
0
26
15
26
0
0
3000
6000
9000
12000
15000
18000
21000
24000
27000
30000
33000
36000
39000
42000
(` i
n c
rore)
2011-12 2012-13 2013-14 2014-15 2015-16 BE 2015-16
Actual
Chart 1.11: Development Expenditure for the years 2011-12 to 2015-16 and budget
estimates vis-à-vis actual Development Expenditure during 2015-16
Development Revenue Expenditure Development Capital Expenditure
Development Loans and Advances
The Development Revenue Expenditure decreased by ` 1,183 crore
(4.70 per cent) from ` 25,163 crore in 2014-15 to ` 23,980 crore in 2015-16. The
decreases under Social and Economic Services were ` 348 crore and
` 835 crore respectively. The actual Development Revenue Expenditure was less
than the State‟s projection in budget by ` 12,196 crore.
The Development Capital Expenditure also decreased by ` 1,163 crore
(30.78 per cent) from ` 3,778 crore in 2014-15 to ` 2,615 crore in 2015-16. The
decrease of ` 1,163 crore in Development Capital Expenditure was due to
decrease in expenditure under Economic Services by ` 1,190 crore, which was
however, offset by increase in expenditure under Social Services by ` 27 crore.
The Development Loans and Advances decreased by ` 371 crore from ` 631
crore in 2014-15 to ` 260 crore in 2015-16. The actual Development Loans and
Advances was also less than the State‟s projection in budget by ` 516 crore.
Chapter I-Finances of the State Government
Audit Report on State Finances for the year ended 31 March 2016 34
1.7.2 Efficiency of Expenditure Use
Table 1.28: Efficiency of expenditure use in selected Social and Economic Services
(In per cent)
Social/ Economic
Infrastructure
2014-15 2015-16
Ratio of
CE to TE@
In RE, the share of Ratio of
CE to TE@
In RE, the share of
S & W O &M¥ S & W O &M¥
Social Services (SS)
Education, Sports, Art and
Culture
-- 22.21 0.39 1.20 24.84 0.17
Health and Family Welfare 0.68 3.25 0.19 0.22 6.70 0.69
Water Supply, Sanitation &
Housing & Urban Development
22.80 1.05 1.59 24.76 1.15 1.81
Other Social Services -- 1.87 0.06 -- 2.01 0.01
Total (SS) 3.05 28.38 2.22 3.25 31.69 2.68
Economic Services (ES)
Agriculture & Allied Activities 0.52 3.07 2.23 1.09 3.32 1.26
Irrigation and Flood Control 67.25 1.61 0.48 58.02 1.72 0.22
Special Areas Programmes 71.49 0.01 -- 64.73 0.91 --
Transport 40.23 1.64 5.43 33.26 1.85 3.03
Other Economic Services 10.82 1.56 0.41 5.48 2.29 0.07
Total (ES) 31.20 7.89 8.54 24.45 9.20 4.58
TE: Total Expenditure; CE: Capital Expenditure; RE: Revenue Expenditure; S&W: Salaries and
Wages; O&M: Operation & Maintenance. @ Total Revenue and Capital Expenditure of the services concerned. ¥ Appendix X of Finance Accounts.
The trends presented in Table 1.28 reveals that the percentage of Capital
Expenditure on Social Services to total expenditure on Social Services increased
from 3.05 per cent in 2014-15 to 3.25 per cent in 2015-16. The increase was
mainly under Water Supply, Sanitation and Housing & Urban Development
sectors under Social Services. The percentage of Capital Expenditure on
Economic Services to total expenditure however, decreased from 31.20 per cent
in 2014-15 to 24.45 per cent in 2015-16. The decrease was recorded under all the
sectors except Agriculture and Allied Services under Economic Services.
The share of salary and wages in Revenue Expenditure on Social Services
increased from 28.38 per cent in 2014-15 to 31.69 per cent in 2015-16 and the
share of salary and wages in Revenue Expenditure on Economic Services also
increased from 7.89 per cent in 2014-15 to 9.20 per cent in 2015-16. The increase
was mainly in Education, Sports, Art and Culture sector under Social Services
and Agriculture and Allied activities sector under Economic Services.
The share of operations and maintenance in Revenue Expenditure on Social
Services increased from 2.22 per cent in 2014-15 to 2.68 per cent in 2015-16
while the share of operations and maintenance in Revenue Expenditure on
Economic Services decreased from 8.54 per cent in 2014-15 to 4.58 per cent in
2015-16. The increase was mainly under Health and Family Welfare and Water
Supply, Sanitation and Housing & Urban Development sectors under Social
Services and the decrease was under Transport and Agriculture & Allied Services
sectors under Economic Services.
Chapter I-Finances of the State Government
35 Audit Report on State Finances for the year ended 31 March 2016
1.7.3 Effectiveness of the Expenditure, i.e., Outlay-Outcome
Relationship
Impact of expenditure on various Sectors
Appendix 1.4 depicts the progress achieved during 2015-16 as compared to
2014-15 in various sectors. In the Education sector, number of upper primary
schools increased from 7,775 in 2014-15 to 7,812 in 2015-16. But, enrollment of
students in both lower and upper primary schools decreased nominally by 3.23
lakh and 0.68 lakh respectively during the year as compared to previous year
2014-15. There was no infrastructural improvement in the Health sector during
the year. In the Power sector, only 58.47 per cent of the sanctioned villages were
electrified during 2015-16 whereas during the previous year,
99.22 per cent of sanctioned villages were electrified. During the period, purchase
and consumption of power increased by 825 Million kWh and 714 Million kWh
respectively whereas generation of power decreased by 44 Million kWh. In the
Irrigation sector, new irrigation potential of 0.25 lakh hectares was created in
2015-16. Per capita income of the State increased significantly from ` 54,618 in
2014-15 to ` 69,442 in 2015-16.
1.8 Financial Analysis of Government Expenditure and Investments
In the post-FRBM framework, the State is expected to keep its Fiscal Deficit
(and borrowing) not only at low levels but also meet its Capital Expenditure
/investment (including Loans and Advances) requirements. In addition, in a
transition to complete dependence on market based resources, the State
Government needs to initiate measures to earn adequate return on its investments
and recover its cost of borrowed funds rather than bearing the same on its budget
in the form of implicit subsidy and take requisite steps to infuse transparency in
financial operations. This section presents the broad financial analysis of
investments and other Capital Expenditure undertaken by the Government during
the current year vis-à-vis previous years.
1.8.1 Incomplete projects
The department-wise information pertaining to incomplete projects as on
31 March 2016 is given in Table 1.29.
Chapter I-Finances of the State Government
Audit Report on State Finances for the year ended 31 March 2016 36
Table 1.29: Department-wise profile of Incomplete Projects
(` in crore)
Department No. of
Incomplete
Projects
Initial
Budgeted
Cost
Cost
Overrun
Cumulative
actual
expenditure
(March 2016)
Public Works (Roads) 75 401.27 11.19* 197.70
Irrigation 15 44.27 -- 34.96
Public Works (Buildings &
National Highways)
36 137.95 -- 65.08
Water Resources 1 21.27 -- 6.38
Total 127 604.76 11.19 304.12
Source: Finance Accounts 2015-16. * Pertains to two projects: Initial Budgeted cost:` 10.46 crore; Revised cost: ` 11.19 crore
As on 31 March 2016, 127 projects which were due to be completed by March
2016 remained incomplete in which ` 304.12 crore was blocked. Of these, 92
projects involving ` 209.98 crore remained incomplete for less than three years,
26 projects involving an amount of ` 59.85 crore remained incomplete for periods
ranging from three to five years and nine projects involving ` 34.29 crore
remained incomplete for more than five years. The cost overrun in respect of two
projects of Public Works Department (Roads) was ` 0.73 crore. The cost overrun
of other incomplete projects could not be determined as the revised cost of
incomplete projects could not be furnished to Audit, though called for.
Delay in completion of works/projects invites the risk of escalation in the cost of
the works, besides the intended benefits from these projects not reaching the
beneficiaries in the State.
1.8.2 Investment and returns
As of 31 March 2016, Government had invested ` 2404.37 crore in Statutory
Corporations, Rural Banks, Joint Stock Companies, Co-operatives and
Government Companies (Table 1.30). The average return on this investment was
1.05 per cent while the Government paid an average interest rate of 6.47 per cent
on its borrowings during 2015-16.
Table 1.30: Return on Investment
(` in crore)
2011-12 2012-13 2013-14 2014-15 2015-16
1 2 3 4 5 6
(a) Statutory Corporations
(No. of concerns)
1,895.70
(4)
1,911.13
(4)
1,967.11
(4)
2,077.41
(4)
2,077.41
(4)
(b) Rural Banks
(No. of concerns)
11.16
(1)
11.16
(1)
11.16
(1)
11.16
(1)
11.16
(1)
(c) Joint Stock Companies
(No. of concerns)
18.04
(15)
18.04
(15)
18.04
(15)
29.05
(16)
29.05
(16)
(d) Co-operatives 107.33 109.83 109.83 110.23 109.84
Chapter I-Finances of the State Government
37 Audit Report on State Finances for the year ended 31 March 2016
(No. of concerns) (18) (18) (18) (18) (18)
(e) Government Companies
(No. of concerns)
162.61
(24)
162.80
(24)
176.05
(24)
176.05
(24)
176.91
(24)
Total Investment 2,194.84 2,212.97 2,282.19 2,403.90 2,404.37
Return (` in crore) 13.64 11.64 12.05 16.23 70.06
Return (per cent) 0.62 0.53 0.53 0.68 2.91
Average rate of interest on
Government borrowing (per cent)
6.78 6.57 6.53 6.40 6.47
Difference between interest rate
and return (per cent)
6.16 6.04 6.00 5.72 3.56
During the last five years, i.e., 2011-16, the State Government‟s investments had
increased by ` 209.53 crore. During the current year, Government did not invest
any amount in Statutory Corporations, Rural Bank and Joint Stock Companies.
However, the Government invested nominally ` 0.86 crore in Government
Companies.
Out of four Statutory Corporations, three were incurring losses and their
accumulated losses amounted to ` 795.66 crore9. Similarly, out of
24 Government Companies in the State, 16 companies were incurring losses and
their accumulated losses amounted to ` 436.97 crore. The major loss incurring
Government Companies were Assam Industrial Development Corporation Ltd.,
(Investment: ` 29.71 crore; accumulated loss: ` 118.35 crore), Assam Agro
Industries Development Corporation Ltd., (Investment: ` 22.08 crore;
accumulated loss: ` 20.58 crore), Assam Seed Corporation Ltd., (Investment:
` 1.25 crore; accumulated loss: ` 13.16 crore), Assam Tea Corporation Ltd.,
(Investment: ` 8.07 crore; accumulated loss: ` 169.82 crore), Assam State Textile
Corporation Ltd., (Investment: ` 4.77 crore; accumulated loss: ` 23.00 crore) and
Assam State Development Corporation for Scheduled Caste Ltd., (Investment:
` 4.88 crore; accumulated loss: ` 23.74 crore).
1.8.3 Loans and advances by State Government
In addition to investments in Co-operative societies, Corporations and
Companies, Government has also been providing Loans and Advances to many
institutions/ organisations. Table 1.31 presents the outstanding Loans and
Advances as on 31 March 2016, interest receipts vis-à-vis interest payments
during the last five years.
9 Assam State Ware-housing Corporation : ` 12.39 crore (as on 31-03-2015);
Assam State Transport Corporation (ASTC) : ` 779.90 crore (as on 31-03-2016);
Assam Financial Corporation, Guwahati : ` 3.37 crore (as on 31-03-2016).
Chapter I-Finances of the State Government
Audit Report on State Finances for the year ended 31 March 2016 38
Table 1.31: Average Interest received on Loans Advanced by the State Government
(` in crore)
Quantum of Loans/ Interest Receipts/
Cost of Borrowings
2011-12 2012-13 2013-14 2014-15 2015-16
Opening Balance 2,987 3,054 3,507 4,323 4,944
Amount advanced during the year 88 460 822 631 260
Amount recovered during the year 21 7 6 10 510
Closing Balance 3,054 3,507 4,323 4,944 5,194
Of which Outstanding balance for which
terms and conditions have been settled
-- -- -- -- --
Net addition 67 453 816 621 -250
Interest Receipts 11 27 18 15 14
Interest receipts as per cent to
outstanding Loans and Advances
0.36 0.77 0.42 0.30 0.28
Average rate of interest on Government
borrowing (per cent)
6.78 6.57 6.53 6.40 6.47
Difference between Interest Payments
and Interest Receipts (per cent)
6.42 5.80 6.11 6.10 6.19
The total amount of outstanding Loans and Advances as on 31 March 2016 was
` 5,194 crore. The amount of loans disbursed during the year decreased by
58.80 per cent from ` 631 crore in 2014-15 to ` 260 crore in 2015-16. Out of the
total amount of loans advanced during the year, ` 2.50 crore went to Social
Services, ` 257.47 crore to Economic Services and ` 0.12 crore to Government
servants. Under Social Services, entire loan went to Urban Development and
under Economic Services, the major portion of loans went to loans for Power
Projects (57 per cent) followed by loans to consumer industries (43 per cent).
Recovery of Loans and Advances increased from ` 10 crore in 2014-15 to ` 510
crore in 2015-16. However, interest receipt against the Loans and Advances
decreased by ` one crore during the year. During 2015-16, fresh Loans and
Advances (` 260 crore) were made during the year to 10 loanee entities10
from
whom repayments of earlier loans (` 3,599.87 crore) were in arrears. Out of 10
entities, loans in respect of Assam Hills Small Industries Development
Corporations (` 29.52 crore) were in arrears since 1976-77.
10
(` in crore)
1. Assam Urban Water Supply and Sewerage Development Board : 49.41
2. Assam Tea Corporation Ltd. : 36.77
3. Assam Hills Small Industries Development Corporations : 29.52
4. Assam Plantation Crops Development Corporations Ltd. : 2.16
5. Assam Power Distribution and Generation Company Ltd. : 2,794.93
6. Assam State Housing Board 5.72
7. Assam Financial Corporation 583.74
8. Ashok Paper Mills Ltd. 4.38
9. Prag Bosimi Syntheties Ltd. (PBSL) 65.00
10. Co-operative Societies 28.24
3,599.87
Chapter I-Finances of the State Government
39 Audit Report on State Finances for the year ended 31 March 2016
1.8.4 Cash Balances and Investment of Cash Balances
Table 1.32 and Chart 1.12 depict the Cash Balances and investments made by
the State Government out of Cash Balances during the year.
Table 1.32: Cash Balances and investment of Cash Balances
(` in crore)
Opening balance on
01.04.2015
Closing balance on
31.03.2016
General Cash Balance
Cash in treasuries 0.00 0.00
Deposits with Reserve Bank (-) 1,652.59 (-) 816.18
Deposits with other Banks 0.00 0.00
Remittances in transit – Local 0.00 0.00
Total (-) 1,652.59 (-) 816.18
Investments held in Cash Balance investment
account
2,004.71 7,510.11
Total (a) 352.12 6,693.93
Other Cash Balances and Investments
Cash with departmental officers viz., Public
Works, Forest Officers
6.18 7.01
Permanent advances for contingent
expenditure with department officers
0.46 0.46
Investment of earmarked funds 3,108.37 3,355.06
Total (b) 3,115.01 3,362.53
Total (a) + (b) 3,467.13 10,056.46
Interest realized 298.76 284.35
3467
10056
2005
7510
31083355
299 284
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
11000
12000
( ` i
n c
ro
re)
Cash balances Investment from cash
balances
Investment from earmarked
balances
Interest realised
Chart 1.12: Cash balance and investment of cash balance
As on 31 March 2015 As on 31 March 2016
Cash Balances of the State Government at the end of the current year increased
significantly from ` 3,467 crore in 2014-15 to ` 10,056 crore in 2015-16. The
State Government from the investments made in GOI Treasury Bills, had earned
Chapter I-Finances of the State Government
Audit Report on State Finances for the year ended 31 March 2016 40
an interest of ` 284 crore during 2015-16. Further, the Government invested
` 3,355 crore in Sinking Fund and Development and Welfare Fund as of
31 March 2016. The interest receipts against investment on cash balance was
3.79 per cent during 2015-16 while Government paid interest at the rate of
6.47 per cent only on its borrowings during the year.
1.9 Assets and Liabilities
1.9.1 Growth and composition of Assets and Liabilities
In the existing Government accounting system, comprehensive accounting of
fixed assets like Land and Buildings owned by the Government is not done.
However, the Government accounts do capture the financial liabilities of the
Government and the assets created out of the expenditure incurred.
Appendix 1.5 gives an abstract of such liabilities and assets as on 31 March 2016
compared with the corresponding position as on 31 March 2015. While the
liabilities shown in the Appendix consist mainly of internal borrowings, Loans
and Advances from GOI, receipts from the Public Account and Reserve Funds,
the assets comprise mainly of the Capital Outlay and Loans and Advances given
by the State Government and Cash Balances.
According to the Assam FRBM Act, 2005 (amended in 2011), the “total liabilities
of the State” means the liabilities under the Consolidated Fund of the State and
the Public Account of the State.
1.9.2 Fiscal Liabilities
The composition of fiscal liabilities during the current year vis-à-vis the previous
year is presented in Charts 1.13 and 1.14.
Chart 1.13:
Composition of outstanding Fiscal
Liabilities as on 01-04-2015
(` in crore)
15733
211871592
Internal Debt
Loans and Advances from GOI
Public Account Liabilities
Chart 1.14:
Composition of outstanding Fiscal
Liabilities as on 31-03-2016
(` in crore)
150824799
16102
Internal D ebt
Lo ans and A dvances fro m GOI
P ublic A cco unt Liabilit ies
The trends in outstanding fiscal liabilities of the State are presented in
Appendix 1.3. Table 1.33 shows the fiscal liabilities of the State, their rate of
Chapter I-Finances of the State Government
41 Audit Report on State Finances for the year ended 31 March 2016
growth, the ratio of these liabilities to GSDP, to Revenue Receipts and to State‟s
own resources and also the buoyancy of fiscal liabilities with reference to these
parameters.
Table 1.33: Fiscal Liabilities-Basic Parameters
Parameters 2011-12 2012-13 2013-14 2014-15 2015-16
Fiscal Liabilities# (` in crore) 31,497 32,897 34,376 38,512 42,409
Rate of Growth (per cent) 6.08 4.44 4.50 12.03 10.12
Ratio of Fiscal Liabilities to:
GSDP (per cent) 22.00 20.97 19.34 19.44 18.91
Revenue Receipts (per cent) 114.72 107.19 106.71 100.86 99.89
Own Resources (per cent) 299.83 306.76 293.81 324.64 330.11
Buoyancy of Fiscal Liabilities with reference to:
GSDP (ratio) 0.518 0.464 0.338 1.051 0.767
Revenue Receipts (ratio) 0.314 0.377 0.907 0.649 0.904
Own Resources (ratio) 0.229 2.135 0.495 8.655 8.295 # Includes Internal Debt, Loans and Advances from GOI, Small Savings, Provident Fund etc.,
Reserve Funds (Gross) and Deposits.
The overall fiscal liabilities of the State increased at an average annual rate of
7.43 per cent during the period 2011-16. During the current year, the fiscal
liabilities of the State Government increased by ` 3,897 crore (10.12 per cent)
from ` 38,512 crore in 2014-15 to ` 42,409 crore in 2015-16. The increase in
fiscal liabilities was mainly due to increase in the internal debt (` 3,612 crore)
and Public Account liabilities (` 369 crore), which was however, offset by
decrease in Loans and Advances from GOI (` 84 crore). The ratio of fiscal
liabilities to GSDP had improved as it had decreased from 19.44 per cent in 2014-
15 to 18.91 per cent in 2015-16 which was well within the norms (26.25 per
cent), prescribed by the XIV FC. The fiscal liabilities of the State were equivalent
to its Revenue Receipts at the end of 2015-16, however they were 3.30 times of
the State‟s own resources during the same period. The buoyancy of the liabilities
with respect to GSDP during the year was 0.767 indicating that for each one per
cent increase in GSDP, fiscal liabilities grew by 0.767 per cent.
The State Government had set up the sinking fund in line with the
recommendations of the Twelfth Finance Commission (TFC) for amortisation of
market borrowings as well as other loans and debt obligations. The fund is
managed by the Reserve Bank of India. As of 31 March 2016, the balance in the
sinking fund was ` 3,335.07 crore, of which ` 3,327.84 crore had been invested.
1.9.3 Status of Guarantees – Contingent Liabilities
Guarantees are liabilities contingent on the Consolidated Fund of the State in case
of default by the borrower for whom the guarantee had been extended. According
to FRBM Act, State Government guarantees shall be restricted to 50 per cent of
State‟s Tax and Non-Tax Revenue of the second preceding year.
Chapter I-Finances of the State Government
Audit Report on State Finances for the year ended 31 March 2016 42
The maximum amount for which guarantees were given by the State and
outstanding guarantees for the last three years are shown in Table 1.34.
Table 1.34: Guarantees given by the Government of Assam
(` in crore)
Guarantees 2013-14 2014-15 2015-16
Maximum amount guaranteed 582 582 482
Outstanding amount of guarantees
including interest
90 143 143
Percentage of maximum amount
guaranteed to total Revenue Receipts
1.81 1.52 0.34
Criteria as per the Assam Fiscal
Responsibility and Budget
Management Act, 2011.
State Government guarantees shall be restricted at any
point of time to 50 per cent of State‟s own Tax and
Non-Tax Revenue of the second preceding year as
reflected in the books of accounts maintained by
Accountant General (Accounts & Entitlement).
Government had constituted (September 2009) a ‘Guarantee Redemption Fund’
for meeting the payment obligations arising out of the guarantees issued by the
Government in respect of bonds issued and other borrowings by the State Level
Public Sector Undertakings or other Bodies and invoked by the beneficiaries. The
accumulations in the Fund would be utilised only towards payment of the
guarantees issued by the Government and not paid by the institution on whose
behalf guarantee was issued. According to the scheme guidelines, the Fund
should be set up by the Government with an initial contribution of ` five crore
and during each year the Government should contribute an amount equivalent to
at least three per cent of the outstanding guarantees at the end of the second
financial year preceding the current financial year as reflected in the books of
accounts as maintained by the Accountant General (Accounts & Entitlement).
During 2015-16, the State Government contributed only ` one crore to the Fund
against required amount of contribution of ` 2.70 crore (3 per cent of ` 90 crore).
This led to short contribution of ` 1.70 crore by the State Government during the
year. No guarantee was invoked during the year. As on 31 March 2016, the total
amount lying in the Fund was ` 26.81 crore (including the interest of ` 1.82 crore
for 2015-16) and the entire amount had been invested by the Reserve Bank of
India.
Government had guaranteed loans raised by various Corporations and others
which at the end of 2015-16 stood at ` 143 crore. It was 1.22 per cent of State‟s
own Tax and Non-Tax Revenue of the second preceding year i.e., well within the
limit prescribed in the Act. Out of the total outstanding guarantees, ` 56.31 crore
(39 per cent) pertained to Power sector.
1.9.4 Ujwal Discom Assurance Yojana (UDAY)
Government of India launched (November 2015) Ujwal Discom Assurance
Yojana (UDAY) for financial turnaround of Power Distribution Companies
Chapter I-Finances of the State Government
43 Audit Report on State Finances for the year ended 31 March 2016
(DISCOMs) and for improving operational and financial efficiency of the State
DISCOMs. Its main objective is to provide affordable and accessible 24x7 power
to all. One of the important provisions of the scheme is that the State shall take
over 75 per cent of DISCOMs debt as on 30 September 2015 over two years – 50
per cent debt shall be taken in 2015-16 and 25 per cent in 2016-17.
Government of Assam has in-principle agreed to the provisions of UDAY. But
State is yet to finalise the financial liabilities for the State after taking over
DISCOMs debt (November 2016).
1.10 Debt Sustainability
Apart from the magnitude of debt of State Government, it is important to analyse
various indicators that determine the debt sustainability of the State. This section
assesses the sustainability of debt of the State Government in terms of growth rate
of debt, sufficiency of non-debt receipts, net availability of borrowed funds,
burden of interest payments (measured by interest payments to Revenue Receipts
ratio) and maturity profile of State Government securities. Table 1.35 analyses
the debt sustainability of the State according to these indicators for the period of
five years beginning from 2011-12.
Table 1.35: Debt Sustainability: Indicators and Trends
(` in crore)
Indicators of Debt
sustainability
2011-12 2012-13 2013-14 2014-15 2015-16
Debt/GSDP (per cent) 22.00 20.97 19.34 19.44 18.91
Sufficiency of Non-debt
Receipts (Resource Gap)
(+) 345 (+) 129 (-) 2,265 (-) 1,649 (+) 8,435
Net Availability of Borrowed
Funds
(-) 1,238 (-) 1,765 (-) 1,387 (+) 1,240 (+) 1,556
Burden of Interest Payments
(IP/RR Ratio)
7.55 6.89 6.82 6.11 6.17
IP/Own Tax Ratio 27.15 19.72 18.79 19.67 20.38
Maturity Profile of State
0 – 1 Year 453.59 475.30 330.50 101.51 106.92
1 – 3 Years 2,312.18 2,055.47 2,505.94 2,743.02 3,276.98
3 – 5 Years 2,546.94 2,868.46 3,102.00 2,431.96 4,378.01
5 – 7 Years 3,099.21 2,439.83 3,867.58 5,640.36 4,519.26
7 Years and above 11,536.67 11,965.13 10,017.00 11,861.41 14,026.18
Table 1.35 reveals that the debt-GSDP ratio had declined from 22.00 in 2011-12
to 18.91 in 2015-16, which was a positive sign towards fiscal consolidation for
improving the debt sustainability position of the State.
The persistent negative resource gap indicates the non-sustainability of debt while
the positive resource gap strengthens the capacity of the State to sustain the debt.
The State had a positive resource gap in three years i.e., 2011-12, 2012-13 and
2015-16 during the five year period 2011-16. During the current year, resource
gap improved and stood at ` 8,435 crore.
Chapter I-Finances of the State Government
Audit Report on State Finances for the year ended 31 March 2016 44
The Public Debt Receipts of the State increased from ` 952 crore in 2011-12 to
` 5,498 crore in 2015-16 at an annual average rate of 96.21 per cent.
It increased significantly by 20 per cent (` 916 crore) from ` 4,582 crore in
2014-15 to ` 5,498 crore in 2015-16. So far as year-end cash balance of the State
is concerned, it increased by ` 6,589 crore from ` 3,467 crore in 2014-15 to
` 10,056 crore in 2015-16.
High level of surplus cash in recent past seems to provide some headroom to
withstand pressure on finances. The reason for cash accumulation was attributed
to conservative approach in capital spending since the capital outlay as a
percentage of total expenditure ranged between a meagre seven and nine per cent
during the period from 2011-16.
In view of the comfortable Cash Balances, the State may consider to defer and/or
resort to more need based borrowing programmes in a cost effective manner. The
State may consider identifying a clear shelf of projects which require capital
investment and borrow only to that extent by realistic assessment of cash needs
with effective cash management for better synchronisation of cash inflows and
outflows. This would at the same time curb unwarranted build-up of cash surplus
as well.
1.11 Fiscal Imbalances
Three key fiscal parameters - Revenue, Fiscal and Primary Deficits - indicate the
extent of overall fiscal imbalances in the Finances of the State Government
during a specified period. The deficit in the Government account represents the
gap between its receipts and expenditure. Chart 1.15 gives an indication of
various kinds of deficits that occur if the Government borrows excessively to
balance the budget.
Chart 1.15: Type of deficits
Deficit
Revenue Deficit Fiscal Deficit Primary Deficit
Revenue
Expenditure –
Revenue Receipts
Revenue Expenditure
+ Capital Expenditure
+ Net Loans and
Advances
– Revenue Receipts –
Miscellaneous Capital
Receipts
Fiscal Deficit –
Interest Payments
Chapter I-Finances of the State Government
45 Audit Report on State Finances for the year ended 31 March 2016
The nature of deficit is an indicator of the prudence of fiscal management of the
Government. Further, the ways in which the deficit is financed and the resources
raised are applied are important pointers to its fiscal health. This section presents
trends, nature, magnitude and the manner of financing these deficits and also the
assessment of actual levels of Revenue and Fiscal Deficits vis-à-vis targets set
under FRBM Act/Rules for the financial year 2015-16.
1.11.1 Trends in Surplus/Deficit
Charts 1.16 and 1.17 present the trends in deficit indicators over the period
2011-16.
92
7
-16
46
42
8
15
54
-15
17
59
8
22
3
-37
82
-15
84
-89
7
-54
30
-30
96
54
46
30
05
56
23
-6000
-4000
-2000
0
2000
4000
6000
( `
in c
rore
)
2011-12 2012-13 2013-14 2014-15 2015-16
Chart 1.16: Trends in Surplus/Deficit Indicators
Revenue Deficit Fiscal Deficit Primary Deficit
0.6
5
0.9
9
0.1
3
-0.4
5
2.4
3
-1.1
5
-0.9
7
-2.1
3
-2.7
4
1.3
4
0.3 0
.38
-0.8
9
-1.5
6
2.5
1
-5-4.5
-4-3.5
-3-2.5
-2-1.5
-1-0.5
00.5
11.5
22.5
33.5
44.5
5
2011-12 2012-13 2013-14 2014-15 2015-16
In p
er
cen
tto
GSD
P
Chart 1.17: Trends in Surplus/Deficit Indicators relative to GSDP
RD/GSDP FD/GSDP PD/GSDP
Chart 1.16 reveals that the State had a Revenue Surplus during 2011-14, which
turned into Revenue Deficit during the year 2014-15. The State again exhibited
Revenue Surplus of ` 3,005 crore during the current year. The surplus in revenue
account during the current year was due to Revenue Receipts being more than
Revenue Expenditure. During the current year Revenue Receipts increased by
11.20 per cent (` 4,276 crore) over the previous year whereas Revenue
Chapter I-Finances of the State Government
Audit Report on State Finances for the year ended 31 March 2016 46
Expenditure decreased only by 5.29 per cent (` 2,067 crore) during the same
period.
Fiscal Deficit represents the gap between the total resources and total expenditure.
Chart 1.16 reveals that the State exhibited Fiscal Surplus for the first time during
2015-16 of the last five year period of 2011-16. In absolute term, the Fiscal
Deficit of ` 5,430 crore of 2014-15 turned into Fiscal Surplus of ` 3,005 crore in
2015-16.
During 2011-13 the State had Primary Surplus which tuned into Primary Deficit
during the years 2013-15. During the current year the State was able to exhibit
Primary Surplus again.
1.11.2 Composition of Fiscal Deficit and its Financing Pattern
The financing pattern of the Fiscal Deficit has undergone a compositional shift as
reflected in Table 1.36.
Table 1.36: Components of Fiscal Deficit and its financing pattern
(` in crore)
Particulars 2011-12 2012-13 2013-14 2014-15 2015-16
1 2 3 4 5 6
Composition of Fiscal Deficit
(FD/GSDP) Deficit (-)/
Surplus (+)
(-) 1,646
(1.31)
(-) 1,517
(1.10)
(-) 3,782
(2.37)
(-) 5,430
(2.95)
(+) 3,005
(**)
1 Revenue Deficit(-)/Surplus(+) (+) 927 (+) 1,554 (+) 223 (-) 897 (+) 5,446
2 Net Capital Expenditure (-) 2,506 (-) 2,617 (-) 3,189 (-) 3,912 (-) 2,691
3 Net Loans & Advances (-) 67 (-) 453 (-) 816 (-) 621 (+) 250
Financing Pattern of Fiscal Deficit*
1 Market Borrowings (+) 654.77 (+) 696.40 (+) 585.66 (-) 2,152.93 (-) 1,896.75
2 Loans from GOI (+) 95.21 (+) 86.62 (+) 113.31 (+) 351.89 (+) 83.50
3 Special Securities Issued to
NSSF
(-) 474.85 (-) 643.25 (-) 668.57 (-) 1,078.14 (-) 1,512.63
4 Loans from Financial
Institutions
(-) 81.36 (+) 4.62 (-) 49.24 (-) 76.05 (-) 203.20
5 Small Savings, PF etc. (-) 634.98 (-) 807.52 (-) 837.17 (-) 890.13 (-) 860.14
6 Deposit & Advances (-) 437.17 (-) 413.21 (-) 157.47 (+) 233.54 (+) 1,005.83
7 Suspense and Misc. (-) 734.76 (+) 404.99 (-) 2,786.10 (-) 1,518.87 (+) 5,734.83
8 Remittances (+) 50.84 (+) 35.27 (-) 10.32 (-) 30.26 (+) 47.66
9 Reserve Fund (-) 67.87 (+) 118.35 (-) 255.66 (-) 320.62 (-) 230.02
10 Decrease (+)/increase (-) in
cash balance with RBI
(-) 15.88 (-) 998.76 (+) 283.26 (+) 52.04 (+) 836.41
*All these figures are net of disbursements/outflows during the year
** There was Fiscal Surplus
It can be seen from Table 1.36 that there was declining trend in Fiscal Deficit
during the years 2011-12 and 2012-13 but it increased significantly during the
years 2013-14 and 2014-15. During 2015-16 the State exhibited Fiscal Surplus.
The decrease in Capital Expenditure during the year indicated that borrowed
funds were being utilised for productive uses less than that of previous year. The
Chapter I-Finances of the State Government
47 Audit Report on State Finances for the year ended 31 March 2016
Government should reverse this trend as the solution to the Government debt
problem lies on the method of application of borrowed funds i.e., whether they
are being used efficiently and productively for Capital Expenditure which either
provides returns directly or results in increased productivity of the economy
which may result in increase in Government revenue in future making debt
payments manageable.
1.11.3 Quality of Deficit/Surplus
The ratio of Revenue Deficit to Fiscal Deficit and the decomposition of Primary
Deficit into Primary Revenue deficit and Capital Expenditure (including Loans
and Advances) would indicate the quality of deficit in the State‟s finances. The
ratio of Revenue Deficit to Fiscal Deficit indicates the extent to which borrowed
funds were used for current consumption. Further, persistent high ratio of
Revenue Deficit to Fiscal Deficit also indicates that the asset base of the State
was continuously shrinking and a part of borrowings (fiscal liabilities) were not
having any asset backup. The bifurcation of the Primary Deficit (Table 1.37)
would indicate the extent to which the deficit has been on account of
enhancement in Capital Expenditure which may be desirable to improve the
productive capacity of the State‟s economy.
Table 1.37: Primary Deficit/Surplus – Bifurcation of factors
(` in crore)
Year Non-
debt
Receipts
Primary
Revenue
Expenditure
Capital
Expenditure
Loans
and
Advances
Primary
Expenditure
Primary
Revenue
Deficit(-)/
Surplus
(+)
Primary
Deficit (-) /
Surplus
(+)
1 2 3 4 5 6 (3+4+5) 7 (2-3) 8 (2-6)
2011-12 27,476 24,454 2,506 88 27,048 (+) 3,022 (+) 428
2012-13 30,698 27,022 2,617 461 30,100 (+) 3,676 (+) 598
2013-14 32,219 29,792 3,189 822 33,803 (+) 2,427 (-) 1,584
2014-15 38,191 36,744 3,912 631 41,287 (+) 1,447 (-) 3,096
2015-16 42,967 34,393 2,691 260 37,344 (+) 8,574 (+) 5,623
There was Primary Surplus in the State during the years 2011-12 and 2012-13 but
it turned into deficit during the subsequent two years i.e., 2013-14 and 2014-15.
The State again exhibited Primary Surplus during 2015-16 since non-debt receipts
were more than the Primary Expenditure. In the current year non-debt receipts
were adequate enough to cover both primary Revenue Expenditure and Capital
Expenditure. Over the period 2011-16, the percentage of Capital Expenditure in
Primary Expenditure had shown inter-year fluctuation and decreased from 9.27
per cent in 2011-12 to 7.21 per cent in 2015-16. The State should give more
emphasis on increase in the percentage of Capital Expenditure in Primary
Expenditure as it would indicate improvement in the productive capacity of the
State‟s economy.
Chapter I-Finances of the State Government
Audit Report on State Finances for the year ended 31 March 2016 48
1.12 Institutional measures
Towards strengthening fiscal discipline in the State, the Government of Assam
had taken certain institutional measures like legislation in respect of guarantees
and fiscal responsibilities in the form of enactment of the Assam Fiscal
Responsibility and Budget Management Act in 2005 (amended in 2011). Since
then the Government had been undertaking measures like implementation of
Consolidated Sinking Fund, introduction of VAT etc.
As a measure to improve fiscal transparency, GOI outlined several initiatives to
assist the State Governments in their developmental and Social roles. Public
Private Partnership (PPP) is such an initiative that enables implementation of
Governments programmes/schemes in partnership with the private sector. The
potential benefits derived from PPP are cost effectiveness of the project, higher
productivity, accelerated delivery, enhanced Social service and recovery of user
charges. It also allows the State Government to use limited budgetary resources
on high priority schemes where private sector is not willing to enter.
In view of the above, several State Governments across India are entering into
PPP agreements in the areas of infrastructure projects, survey and exploitation of
mines and minerals, development of industrial estates, development of
hydro-electricity projects etc.
The Government of Assam formulated (February 2008) the policy on public
private partnership in Infrastructure Development in the State. Table 1.38
indicates that during 2014-15 and 2015-16, Government of Assam had taken up
various PPP projects for implementation of which three projects11
were
completed in 2014-15 whereas two12
projects were completed in 2015-16.
Further, as of 31 March 2016, six13
projects were under
implementation/construction and eight projects were under planning/pipeline.
11
(i) O &M of Organic Agriculture Produces Market Complex at Sixmile, Guwahati;
(ii) North East Tribal Museum & Cultural Centre;
(iii) O & M of Skilled Development Training Centre. 12
(i) Five Star Hotel at Guwahati;
(ii) I.I.I.T., Guwahati. 13
(i) Desang Small Hydro Electric Power Projects (3 x 3 MW);
(ii) Pahumara Power Project (2 MW);
(iii) Rupahi Power Project (0.4 MW);
(iv) 20 MW Dhansiri SHP;
(v) Construction of Games Village (Phase-II);
(vi) IT Park, Guwahati.
Chapter I-Finances of the State Government
49 Audit Report on State Finances for the year ended 31 March 2016
Table 1.38: Status of implementation of PPP projects
Sl
No.
Particulars 2014-15 2015-16
1. No. of completed projects 3 2
Cost incurred of which (` in crore) 26.21 230.50
Government's contribution (` in crore) 26.21 0.5 & 15
Bighas of Land
2. No. of projects under implementation
8
6
Cost incurred of which (` in crore) 3,201.70 2,971.20
Government's contribution (` in crore) 13.28/land 12.78 & land
3. Under Planning/ Pipeline projects
(Number)
10 8
Cost of the project of which Cost not
finalised
Cost not
finalised
Government's contribution --
Source: Planning and Development Department, Government of Assam.
Information for 2014-15 was revised at the instance of Planning and Development Department.
Although the State Government had completed five PPP projects during last two
years i.e., 2014-16, the PPP cell under the control of Planning and Development
Department could not furnish any information regarding the date of commission,
revenue sharing pattern etc., of the completed projects, though called for.
1.13 Conclusion and Recommendations
The State had maintained Revenue Surplus during four years of last five year
period – 2011-16 except during the year 2014-15. During the current year i.e.,
2015-16, the State has Revenue Surplus of ` 5,446 crore. As a major turnaround
towards the fiscal consolidation, the State exhibited the Fiscal Surplus of ` 3,005
crore during 2015-16. Primary Deficit of the last year also turned into Primary
Surplus and stood at ` 5,623 crore during 2015-16.
Revenue Receipts
Revenue Receipts grew by ` 4,276 crore (11 per cent) over the previous year.
The increase was contributed by Tax Revenue ` 656 crore (15 per cent), Non-Tax
Revenue by ` 328 crore (eight per cent) and State‟s share of Union Taxes and
Duties by ` 4,502 crore (105 per cent). The increase was however, offset by
decrease in Grants-in-Aid from GOI by ` 1,210 crore (28 per cent). The Revenue
Chapter I-Finances of the State Government
Audit Report on State Finances for the year ended 31 March 2016 50
Receipts at ` 42,457 crore was more by ` 2,596 crore than the assessment made
in Medium Term Fiscal Plan (MTFP)14
(` 39,861 crore)
(Para-1.1.1)
Revenue Expenditure
The overall Revenue Expenditure of the State increased by 39.52 per cent
from ` 26,528 crore in 2011-12 to ` 37,011 crore in 2015-16 at an annual average
rate of 7.90 per cent. Non-Plan Revenue Expenditure (NPRE), which constituted
a dominant share of nearly 75 per cent during the last five-year period
i.e., 2011-16, decreased by ` 2,111 crore (7.11 per cent) during the current year
over the previous year. The Plan Revenue Expenditure (PRE) increased
nominally by ` 44 crore (0.47 per cent) from ` 9,391 crore in 2014-15 to
` 9,435 crore in 2015-16.
(Para-1.6.3)
During 2015-16, the Development Expenditure (` 26,855 crore) decreased by
` 2,717 crore (nine per cent) over the previous year. The relative share of the
Revenue Developmental Expenditure was 60 per cent of the total expenditure
while this share in respect of Capital Development Expenditure was only
six per cent.
(Para-1.7.1)
Investment and Returns
As on 31 March 2016, 127 projects which were due to be completed by March
2016 remained incomplete in which ` 304.12 crore was blocked.
(Para-1.8.1)
The average return on State Government‟s investment in Statutory Corporations,
Rural Banks, Joint Stock Companies, Co-operatives and Government Companies
varied between 0.53 and 2.91 per cent in the last five years whereas the State
Government‟s average interest outgo was in the range of 6.40 to 6.78 per cent
during the corresponding period.
(Para-1.8.2)
Cash Balances of the State Government at the end of the current year increased
significantly from ` 3,467 crore in 2014-15 to ` 10,056 crore in 2015-16. The
interest receipts against investment on Cash Balance was 3.79 per cent during
2015-16 while Government paid interest at the rate of 6.47 per cent on its
borrowings during the year.
(Para-1.8.4)
14 MTFP: As required under Section 3 of the Act, the State Government laid before the State Legislative
Assembly a five year rolling Fiscal Plan along with Annual Financial Statement showing therein the
relevant fiscal indicators and future prospects for growth.
Chapter I-Finances of the State Government
51 Audit Report on State Finances for the year ended 31 March 2016
Fiscal liabilities
The overall fiscal liabilities of the State increased at an average annual rate of
7.43 per cent during the period 2011-16. During the current year, the fiscal
liabilities of the State Government increased by ` 3,897 crore (10.12 per cent)
from ` 31,497 crore in 2014-15 to ` 42,409 crore in 2015-16. The ratio of fiscal
liabilities to Gross State Domestic Product (GSDP) had improved and decreased
from 19.44 per cent in 2014-15 to 18.91 per cent in 2015-16 which was well
within the norms (26.25 per cent), prescribed by the XIV FC.
(Para-1.9.2)
The recommendations are:
The State Government may explore the possibility to mobilise additional
resources both through tax and non-tax sources by expanding the tax base
and rationalising the user charges. Efforts should also be made to increase
tax compliance, reduce tax administration costs, etc. Further, in order to
ensure sustainable progress towards fiscal consolidation, State needs to
continue to ensure a pattern of expenditure that not only ensures better
growth but also enhances public welfare.
Effective steps need to be taken for expeditious completion of the incomplete
projects to avoid further cost overrun and delay in achieving the objectives.
A performance-based system of accountability should be put in place in the
Government Companies/Statutory Corporations so as to derive profitability
and improve efficiency in service. The Government should ensure better value
for money in investments by identifying the Companies/Corporations which
are endowed with low financial but high socio-Economic returns and justify
the use of high cost borrowed funds for non-revenue generating investments
through clear and transparent guidelines.